Question

the graph contains individual supply curves for the only two firms in a hypothetical market for stuffed animals. place the market supply curve at the correct location on the graph. then, consider what would happen to the market if a third supplier enters the market, holding all else constant.
a third firm would mean
market supply increases.

Explanation:

When a new firm enters a market (in this case, a third firm enters the market for stuffed animals), it adds to the existing supply. The market supply curve is the horizontal sum of all individual firm supply curves. With an additional firm contributing to supply (by being willing to produce and sell stuffed animals at various price levels), the total quantity supplied in the market at each price level increases. This results in a right - ward shift of the market supply curve, which is equivalent to an increase in market supply.

Answer:

A third firm would mean market supply increases.