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Question
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 down.
c. decrease, causing the supply to decrease.
d. decrease, causing the supply to increase.
e. increase, causing the supply to increase.
Answer
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Related questions
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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Q:
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Q:
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