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    Competition and pricing

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    How does competition affect profits and prices? What causes some firms to enter an industry, and others to leave it? What are the effects on profits and prices of new firms entering and old firms leaving?

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    The more competition there is, the least profits you have. So that in a pefectly competitive market, supply meets demand where the demand curve meets the MC, which in turn meets equals AVC, for each company. ...

    Solution Summary

    This solution helps explore economic concepts such as competition and pricing.