When a Third Firm Enters a Market That Was Previously

question 88

Multiple Choice

When a third firm enters a market that was previously categorized as a duopoly,the equilibrium price will ________ and the equilibrium quantity will ________.

• A) be lower; be lower
• B) be higher; be lower
• C) be lower; be higher
• D) be higher; be higher
• E) not change; not change

Comprehend the lean business model, including its main idea of eliminating waste and practices for continuous improvement.

Distinguish between managerial and financial accounting, focusing on their objectives and reporting requirements.

Recognize the importance of control measures in management, including performance reports and the PDCA Cycle.

Identify the importance and characteristics of total quality management in enhancing organizational performance.

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Definitions:

Competitive Price-searcher

A market participant who sets prices through active search and strategy, often in markets with some degree of product differentiation.

Product Diversity

The variation of products and services offered in a market to meet different customer needs and preferences.

Firms Exit

This occurs when businesses cease operations and leave a market, typically due to factors like unprofitability, competitive pressures, or changing market conditions.

Competitive Price-searcher

This refers to a market situation where companies set their prices based on competition and market conditions, aiming to attract customers by offering better deals than their rivals.