When a Third Firm Enters a Market That Was Previously

question 46

Multiple Choice

When a third firm enters a market that was previously categorized as a duopoly, the equilibrium price:

• A) will be lower and the equilibrium quantity will be lower.
• B) will be higher and the equilibrium quantity will be lower.
• C) will be lower and the equilibrium quantity will be higher.
• D) will be higher and the equilibrium quantity will be higher.
• E) and the equilibrium quantity will not change.

Understand the effects of trade on consumption possibilities.

Differentiate between absolute and comparative advantages in real-world scenarios.

Understand the concept of comparative advantage and how it determines production specialization between countries or individuals.

Identify the relationship between opportunity costs and comparative advantage.

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