Author Question: If new firms enter a perfectly competitive industry seeking economic profit and begin producing ... (Read 73 times)

formula1 · **on:** Jun 30, 2018

If new firms enter a perfectly competitive industry seeking economic profit and begin producing goods, which of the following will occur?
a. The market supply curve will shift leftward with movement along an unchanged demand curve.
b. The market supply curve will shift rightward with movement along an unchanged demand curve.
c. The market supply and demand curves will both shift to the left.
d. The market supply and demand curves will both shift to the right.
e. There will be movement down and to the right along a fixed supply curve.

Question 2

Nondiscriminating monopoly is similar to perfect competition in that
a. they have the same level of barriers to entry
b. they have a similar number of firms in the industry
c. the demand curve facing the firm is perfectly elastic for both
d. price equals marginal revenue for both
e. price equals average revenue for both