An increase in market price is likely to result in more firm entry in the long run.

Question

Quizplus · Accepted Answer

When market prices increase, it signals that there is high demand for the goods/services being offered in the market. This makes it attractive for new firms to enter the market to take advantage of the profit opportunities. In the long run, increased market competition can lead to supply expansion, which can help to stabilize prices and benefit consumers.

An Increase in Market Price Is Likely to Result in More