Pricing and Output under Pure Competition INDUSTRY P1 P1 Output in Million 01 Output in Hundred Figure 88: Purely Competitive Model with Few Firms However, the aforementioned condition cannot stay long. We know that under a purely competitive model, there is freedom of entry by new rms. So long as there is economic prot in a business endeavor, rms would be attracted to it and would thus venture into the business. The entry of new rms is illustrated by the shift of the supply curve to the right as the following graphs show. INDUSTRY 31 Output in Million We can see from the graphs the eect on consumer's welfare for markets character- ized by pure competition. Consumers\" wel- fare is affected through the following: 1. Increase in output for the economy increases the supply curve, thus benet- ting the consumers in the choice of' greater output; and 2. Lower prices are shown from the down- ward shift of prices from P1 to P3. Lower FIRM Q3 Output in Hundred Figure 69: Purer Competitive Model with Many Firms