Question

If an industry is highly profitable, new firms are likely to enter the market. This would be reflected with a shift of the
A- demand curve to the right
B-supply curve to the right
C-supply curve to the left
D- demand curve to the left

Answer 1

What do you think when more firms enter the market, will there be more suppliers? Will the price go higher or lower? Draw the supply demand curve and predict the new price (in a competitive market).