Question

Assume a market is perfectly competitive. when a new producer enters the market, the
a. price in the market decreases.
b. price in the market increases.
c. price in the market does not change.
d. market is no longer a competitive market.

Answer 1

Assume a market is perfectly competitive. When a new producer enters the market, the: c) price in the market does not change.

A huge number of producers comprises a perfectly competitive market, therefore, no new producer can affect them. A new producer isn’t huge enough to influence the supply’s price.