The figure shows the market demand curve for bread, together with original and new supply curves, where the curve has shifted due to new bakeries entering the market. All bakeries are identical, and there are no entry costs. Which one of the following statements is correct?
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Question

The figure shows the market demand curve for bread, together with original and new supply curves, where the curve has shifted due to new bakeries entering the market. All bakeries are identical, and there are no entry costs. Which one of the following statements is correct?

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Answer

The supply of bread has become less elastic.

Answer

New bakeries will continue to enter until the price equals their average cost.

Answer

The bakeries' marginal cost of production has fallen.

Answer

With the fall in price, the bakeries now make a loss.

Crowdly

The figure shows the market demand curve for bread, together with original and n...

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