If the typical firm in a perfectly competitive market was depicted in the graph below, what would be most likely to occur?
A. New firms would be likely to enter, increasing the market price.
B. New firms would be likely to enter, decreasing the market price.
C. Existing firms would be likely to exit, increasing the market price.
D. Existing firms would be likely to exit, decreasing the market price.
Answer: B. New firms would be likely to enter, decreasing the market price.
Economics
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What will be an ideal response?
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