CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

As new firms enter an industry, the price ______

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.
Correct Answer: C

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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