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Assume a market is perfectly competitive. When a new producer enters the market, the _______

User Soolar
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Final answer:

New technology leading to a reduction in costs of production will attract new producers and decrease the market price in a perfectly competitive market.

Step-by-step explanation:

If new technology leads to a substantial reduction in costs of production in a perfectly competitive market, it will affect the market by attracting new producers. This is because the reduced costs allow these new producers to enter the market and still make a profit. As more producers enter the market, the supply of goods or services increases, leading to a shift in the supply curve to the right, and causing the market price to decrease.

User Ivano
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