When New Firms Have an Incentive to Enter a Competitive

question 209

Multiple Choice

When new firms have an incentive to enter a competitive 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.

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Definitions:

Cost Curve

A graphical representation that shows the cost of producing different quantities of a good or service.

Minimizing Losses

Minimizing Losses involves strategies and actions a business or individual might employ to reduce financial setbacks or decrease the severity of financial downturns.

Total Loss

The complete depletion of value of an asset or the sum of expenses surpassing all revenues, resulting in no net gain.

Most Efficiently

The method or process that achieves the best possible outcome with the least waste of resources.