1/19/2024 When new firms enter a perfectly competitive market, the short-run market supply curve shifts right.Read Now![]() ![]() must show a consumer taste-test to be successful. On the basis of a theory that people buy a product because it is advertised, the content of advertisements for Bertollini's product O a. On the basis of its market research, Bertollini estimates that its initial 1.5 million customers will buy one unit of the product each month in the coming year, for a total of 18 million units. Bertollini's market research suggests that its product is very good, and consumers who try the product will continue to be consumers over the ensuing year. Even though it could get 1.5 million consumers to buy the product once, it is unlikely that they will continue to buy the product in the future. Yum Yum has done market research which suggests that its product does not have any "staying" power in the market. Each company knows that if it spends $12 million on advertising it will get 1.5 million consumers to try its new product. Assume that the marginal cost for each new product is a constant S2, and the only fixed cost is for advertising. Each firm has just come up with an idea for a new "frozen meal for two" which it would sell for $9. Scenario 16-7 Consider the problem facing two firms, Yum Yum and Bertollini, in the frozen food market. ![]() existing firms will increase prices to keep the new firms from entering. the short-run market supply curve shifts left. the short-run market supply curve shifts right. When new firms enter a perfectly competitive market, O a.
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