Firm a Notices That Firm B Is Making a Profit

question 167

Multiple Choice

Firm A notices that Firm B is making a profit by producing footballs.There is nothing stopping Firm A from entering the football market,so it does.Holding all else constant,the number of firms in the market will

• A) increase,causing demand to increase.
• B) increase,causing the supply to shift down.
• C) decrease,causing the supply to decrease.
• D) decrease,causing the supply to increase.
• E) increase,causing the supply to increase.

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