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New Market Entrant and Changes to Equilibrium Price and Quantity

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I have a dental office business with mobile service.

Tell me whether you expect the equilibrium price of my product to rise or fall AND whether you expect equilibrium quantity to rise or fall.

Include in your explanation which curve is shifting and which shifter variable is affected.

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Solution Summary

This answer looks at the effects a new market entrant into the mobile dental services market affects equilibrium price and quantity in various scenarios.

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There are several variables that need to be looked at with this scenario. 1) Ease of entry into the mobile dental services market 2) Current number of mobile dental services providers. 3) Acceptance of insurance providers to accept provided services as in-network or out-of-network. 4) Current market prices.

If it is very easy for other firms to enter the market, equilibrium price will have downward pressure and equilibrium quantity will ...

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