When New Firms Enter a Competitive Price-Taker Market

question 81

Multiple Choice

When new firms enter a competitive price-taker market,

• A) economic profits of existing firms will continue to be zero.
• B) entering firms will earn zero economic profit upon entry into the market.
• C) existing firms may see their costs rise as more firms compete for limited resources.
• D) prices will rise as existing firms raise prices to keep new firms out of the market.

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Definitions:

Moses

A key figure in the Abrahamic religions, regarded as a prophet, lawgiver, and leader who delivered the Israelites from Egyptian slavery and received the Ten Commandments from God.

Monument

A structure erected to commemorate a famous or important person or event, often significant in historical or cultural contexts.

Michelangelo

Renowned Italian sculptor, painter, architect, and poet of the High Renaissance, famous for works like the Sistine Chapel ceiling and the statue of David.

Arcadian Theme

Represents idyllically pastoral landscapes and peaceful, harmonious settings in art, often idealizing rural life.