Answer to Question #106994 in Microeconomics for raj

Question

under perfect competition , entry of new firms into the market in the long run tends to : ??

1) Reduce the Market Power of the existing firms 2) raise the level of profit of the existing firms
3) Reduce the Degree of competitiveness in the market 4 ) Raise the aggregate demand for goods 5) Raise the aggregate Supply

Answer 1

Under perfect competition , entry of new firms into the market in the long run tends to : 1) Reduce the Market Power of the existing firms; 5) Raise the aggregate Supply