If There Are Economic Profits in a Monopolistically Competitive Industry

question 23

Multiple Choice

If there are economic profits in a monopolistically competitive industry, they will generally be competed away through the

• A) introduction of brand name products by existing firms.
• B) manipulation of the demand curve.
• C) increasing advertising budgets of existing firms.
• D) entry of new firms.
• E) exit of existing firms.

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Definitions:

Resource Consumption

Resource consumption refers to the use of natural resources by humans for energy, food, materials, and other necessities.

Density-Dependent

Factors whose effects on the size or growth of a population vary with the population density.

Density-Independent

Referring to effects on population growth that are not related to the density of the population, such as weather disasters or human activities.

Predation

An interaction between two species where one organism (the predator) hunts and eats another organism (the prey).