When Firms in Monopolistic Competition Are Making an Economic Profit

question 260

Multiple Choice

When firms in monopolistic competition are making an economic profit, firms will

• A) enter the industry, and demand will increase for the original firms.
• B) exit the industry, and demand will increase for the firms that remain.
• C) exit the industry, and demand will decrease for the firms that remain.
• D) enter the industry, and demand will decrease for the original firms.