Answer:
The total number of firms in this industry will decrease in the long run because increased competition will mean lower profit margins which will lead to some firms earning sub normal profits which will force them to leave the industry.
Explanation:
Answer:
It distorts relative prices, causing a misallocation of resources.
Explanation: Inflation is an economic term used to describe a situation in a country's market when there is a sudden rise in commodities sold in the market. Inflation can be as a result of an increase in demand of commodities sold in the market.
It has a negative effect, when the prices are distorted and the purchasing power is not properly allocated to the buyers.
It indicates signs of inflation in the economy