Firm a Notices That Firm B Is Making a Profit

question 130

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 up.
• 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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Definitions:

Factual

Based on facts; representing information that is true and can be verified through evidence or observation.

Experimental

Pertaining to a method of investigation or testing that involves controlled conditions to explore hypotheses, establish causality, or discover effects.

Logical

Pertaining to clear, formal reasoning, or relating to the use of reason and understanding to assess ideas and arguments.

Intuitive Thinking

Intuitive thinking is a cognitive process that occurs without explicit reasoning, relying on instinctive feelings rather than systematic analysis of information.