If price exceeds average costs under pure competition,____ firms will enter the industry,supply will ____,and price will be driven ____.

Question

Quizplus · Accepted Answer

When price exceeds average costs in a purely competitive market, more firms are attracted to enter the industry, which increases the supply. As supply increases, the price is driven down due to the higher competition and availability of products.

If Price Exceeds Average Costs Under Pure Competition,____ Firms Will