When Firms in Monopolistic Competition Make an Economic Profit

question 128

Multiple Choice

When firms in monopolistic competition make an economic profit,

• A)firms enter the industry,which increases demand for the product of the firms originally in the market.
• 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 decreases for the firms that were originally in the industry.
• E)eventually the market will become a monopoly.

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Definitions:

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Expression

A combination of numbers, variables, and operations representing a particular value, without an equality sign unlike an equation.

Golden Section

A mathematical ratio denoted by the Greek letter phi (φ), approximately equal to 1.618, which is considered aesthetically pleasing and is found in art, architecture, and nature.

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