The Following Graph Shows the Costs and Revenues of a Typical

question 67

Multiple Choice

The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry.

-Refer to the graph above to answer this question.Which of the following will be the result of the situation illustrated in the graph?

• A)New firms will enter the industry and this will shift the market supply curve to the right.
• B)New firms will enter the industry and this will shift the market supply curve to the left.
• C)Some firms will exit from the industry and this will shift the market supply curve to the right.
• D)Some firms will exit from the industry and this will shift the market supply curve to the left.
• E)Long run equilibrium has been achieved and no new entry or exit of firms will occur.

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Definitions:

Control Group

In an experiment, the group of participants who are not exposed to the independent variable, used as a comparison to measure the effect of the treatment.

Experimental Group

The group in an experiment that receives the variable being tested, allowing researchers to determine the effect of that variable.

Human Laboratory Studies

Research experiments conducted in controlled environments on human subjects to study behavior, reactions, or biological processes.

Generalizability

The extent to which findings or conclusions from a study can be applied to broader contexts beyond the study settings or subjects.