When Existing Firms in a Competitive Market Are Profitable, an Incentive

question 438

Multiple Choice

When existing firms in a competitive market are profitable, an incentive exists for

• A)new firms to seek government subsidies that would allow them to enter the market.
• B)new firms to enter the market, even without government subsidies.
• C)existing firms to raise prices.
• D)existing firms to increase production.

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