There are several pen manufacturers in Corinthia. However, the pens sold by each manufacturer have a unique design. How will the demand for pens faced by the existing pen manufacturers in Corinthia be affected if new firms enter the industry in the long run?a.The demand curve faced by the existing firms will become perfectly elastic.b.The demand faced by the existing firms will decrease.c.The demand curve faced by the existing firms will become perfectly inelastic.d.The demand faced by the existing firms will increase.

Demand is the total quantity of products and services for which the customers are ready to pay…

Answered: There are several pen manufacturers in…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter10: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 16CQ

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There are several pen manufacturers in Corinthia. However, the pens sold by each manufacturer have a unique design. How will the demand for pens faced by the existing pen manufacturers in Corinthia be affected if new firms enter the industry in the long run?

The demand curve faced by the existing firms will become perfectly elastic.

The demand faced by the existing firms will decrease.

The demand curve faced by the existing firms will become perfectly inelastic.

The demand faced by the existing firms will increase.

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