In perfect competition,if firms enter the market in the long run
A)total supply will increase causing market price to increase.
B)total supply will decrease causing market price to decrease.
C)total supply will decrease causing market price to increase.
D)total supply will increase causing market price to decrease.

Question

Quizplus · Accepted Answer

In perfect competition, if firms enter the market in the long run, the total supply will increase, leading to a greater supply-demand gap resulting in a decrease in market price. This is the essence of the law of supply, which states that an increase in supply results in a decrease in price.

In Perfect Competition,if Firms Enter the Market in the Long