Question

The entry of firms into a market Group of answer choices Shifts the market supply curve to the left. Increases the equilibrium price. All of the Answers are Correct. Shifts the market demand curve to the left. Reduces the profits of existing firms in the market.

Answer 1

The entry of firms into a market reduces the profits of existing firms in the market.

An economic market is a composite structure that is composed of multiple elements.

• Firms can be placed in the category of competitive markets which are broadly categorized as perfect competition firms or monopolistic competition firms; monopoly, and oligopoly.
• An entry is characterized by a response to increasing profits in the industry.
• These high profits facilitate the entry of new firms into the market.
• The profits of the existing firms reduce as a reaction to the entry of new firms into a market structure.
• Existing firms exit when they start facing recurrent losses.

Therefore, the entry of firms into a market reduces the profits of existing firms in the market.

Learn more about the entry of firms into a market here: brainly.com/question/2975624

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