Asked by
Shanice Calhoun
on Dec 10, 2024
Verified
When new firms have an incentive to enter a competitive price-taker market, their entry will
A) increase the price of the product.
B) drive down profits of existing firms in the market.
C) shift the market supply curve to the left.
D) increase demand for the product.
Price-Taker Market
A market structure where individual firms have no control over the price of their product, taking the market price as given.
Market Supply Curve
A graphical representation of the quantity of goods suppliers are willing to sell at different price levels.
Economic Profit
The disparity between a company's overall income and its comprehensive expenses, encompassing both out-of-pocket and implied costs.
- Discern the impact that the commencement and cessation of enterprises have on the steadiness of prices and on the economic returns in a competitive environment where firms act as price takers.
- Identify the factors driving firms to enter or exit the market.
Verified Answer
OH
Learning Objectives
- Discern the impact that the commencement and cessation of enterprises have on the steadiness of prices and on the economic returns in a competitive environment where firms act as price takers.
- Identify the factors driving firms to enter or exit the market.