If Firms Are Able to Freely Enter and Exit a Monopolistically

question 58

Multiple Choice

If firms are able to freely enter and exit a monopolistically competitive industry,then we can predict

• A)a negatively sloped demand curve for the industry.
• B)that exit will occur until no firm has excess capacity.
• C)strategic behaviour with regard to other firms in the industry.
• D)brand proliferation.
• E)zero profits in long- run equilibrium.