When Firms in Monopolistic Competition Incur an Economic Loss

question 93

Multiple Choice

When firms in monopolistic competition incur an economic loss,

• A)firms enter the industry and produce better products.
• B)firms exit the industry,and demand increases for the products of the firms that remain.
• C)firms exit the industry,and demand decreases for the firms that remain in the industry.
• D)firms enter the industry,and demand increases for the firms that were originally in the industry.
• E)the industry will eventually disappear.

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Definitions:

Positioning Statement

A succinct description of the core target market to which a product is directed and a compelling picture of how the firm wants that core market to view the product.

Competitive Advantages

Unique attributes or capabilities that allow a company to outperform its competition, leading to greater sales or margins and market share.

Marketing Mix

A set of controllable, tactical marketing tools—product, price, place, and promotion—that a company uses to produce a desired response in the target market.

Adds Value

The process of enhancing a product or service before offering it to customers, thereby increasing its worth.