The accompanying graph contains individual supply curves for the only two firms in a hypothetical market for stuffed animals. Place the market supply curve at the correct location on the graph. Price per Stuffed Animal($) 10 9 8 7 5 3 2 1 Market for Stuffed Animals Firm Firm 2 Market 0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Quantity of Stuffed Animals What happens to the market if a third supplier enters the market, holding all else constant? The emergence of a third supplier will result in higher prices of stuffed animals. Firm 1 and Firm 2 will lower output to accommodate the new supplier in order to keep market supply constant. Market supply decreases. Market supply increases.

The accompanying graph contains individual supply curves for the only two firms in a hypothetical market for stuffed animals. Place the market supply curve at the correct location on the graph. Price per Stuffed Animal($) 10 9 8 7 5 3 2 1 Market for Stuffed Animals Firm Firm 2 Market 0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Quantity of Stuffed Animals What happens to the market if a third supplier enters the market, holding all else constant? The emergence of a third supplier will result in higher prices of stuffed animals. Firm 1 and Firm 2 will lower output to accommodate the new supplier in order to keep market supply constant. Market supply decreases. Market supply increases.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.13P

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