Which of the following would make a market MORE competitive?

Question

Which of the following would make a market MORE competitive?

a. fi􏰃rms exiting the market due to negative pro􏰃fits

b. one 􏰃rm in a market innovates and patents their innovation

c. 􏰃firms enter a market due to positive pro􏰃fits

d. if the government placed a commodity tax in a market

Answer 1

As firms enter chasing after profit there will be more competitors which make the market more competitive.