Assume a third supplier chooses to join the industry, pour enfants. what will happen as a result? assume there is free entry and exit in this market.

Respuesta :

If a third supplier chooses to join the industry then the demand will be divided which will result to a lower income of the 2 suppliers. Unless if the 2 suppliers are really strong suppliers which has already make a name, then the third supplier may not make a difference in the market. A surplus of the goods may also occur because another supplier joins