As New Monopolistically Competitive Firms Enter the Market, the Demand

question 82

Multiple Choice

As new monopolistically competitive firms enter the market, the demand facing each firm __________, causing the price charged by each firm to __________.In the long run, each firm will earn a __________ profit.

• A)falls; rise; positive
• B)rises; fall; positive
• C)falls; rise; normal
• D)rises; fall; normal
• E)falls; fall; normal

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Definitions:

Harvest Goal

An entrepreneur's strategic objective to eventually realize a venture's value through a sale, merger, or initial public offering (IPO).

Venture

A business undertaking that involves risk, often utilized in the context of new or speculative enterprises.

Shareholder Return

The total earnings a shareholder receives from an investment, including dividends and capital gains.

Return On Assets

A financial ratio that measures how efficiently a company uses its assets to generate profit.