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Basic Question 8 of 10
As new firms enter an industry, the price ______
B. rises and the economic profit of each existing firm decreases.
C. falls and the economic profit of each existing firm decreases.
A. rises and the economic profit of each existing firm increases.
B. rises and the economic profit of each existing firm decreases.
C. falls and the economic profit of each existing firm decreases.
User Contributed Comments 3
| User | Comment |
|---|---|
| bluefin209 | Because supply increases. |
| surjani | beacause every firm will share profit equally.new firm enter than price distribute and profit also distribute. |
| frants54 | Price in not distributed. Price goes down as there is excess supply in the market. |
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Learning Outcome Statements
describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly
CFA® 2024 Level I Curriculum, Volume 1, Module 1.