Use the Figure Below to Answer the Following Questions

question 7

Multiple Choice

Use the figure below to answer the following questions.

Figure 14.2.4
-Refer to Figure 14.2.4. The figure represents a monopolistically competitive firm in short-run equilibrium. In the long run,

• A)new firms enter, and each existing firm's demand curve shifts leftward.
• B)new firms enter, and each existing firm's demand curve shifts rightward.
• C)existing firms exit, and each remaining firm's demand curve shifts leftward.
• D)existing firms exit, and each remaining firm's demand curve shifts rightward.
• E)the equilibrium is the same as in the short run.

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Definitions:

Economics

The study of how people use their scarce resources to satisfy their unlimited wants

Physical Capital

Manufactured items used to produce goods and services; includes new plants and new equipment.

Petty Cash

A small amount of cash on hand that is used for paying minor or incidental expenses in a business.

Free Goods

Items or services available in abundance without direct cost, such as air or sunlight, not requiring scarce resources for their production.