An Increase in the Number of Firms Entering a Market

question 208

Multiple Choice

An increase in the number of firms entering a market causes the

• A)market price to increase.
• B)cost per unit to decline.
• C)market price to decline.
• D)cost per unit curve to shift up.
• E)cost per unit curve to shift down.

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Definitions:

Financial Crisis

A situation where financial assets suddenly lose a large part of their nominal value, often leading to bankruptcies, bank failures, and economic downturns.

Price Level

A measure of the average prices of goods and services in an economy, indicating inflationary trends and purchasing power.

Adverse Supply Shock

An unexpected event that suddenly decreases the supply of a commodity or service, leading to increased prices and potentially stalling economic output.

Money Supply Growth Rate

The speed at which the total money supply in an economy grows within a certain timeframe.