Graphically,what Will Be the Effect of Entry by New Firms

question 130

Multiple Choice

Graphically,what will be the effect of entry by new firms into a monopolistically-competitive industry?

• A)It will shift each firm's demand curve to the right.
• B)It will shift each existing firm's demand curve to the left.
• C)It will shift the market's supply curve to the left.
• D)It will shift the market's demand curve to the right.

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Definitions:

Judicious

Showcasing good judgment or prudent decision-making.

Proposed Plan

A suggested course of action or strategy, typically presented for consideration, approval, or implementation.

Risky Shift

A phenomenon where group decisions tend to be riskier than the average of the individual choices initially proposed by the group members.

Conservative Shift

A psychological theory indicating that groups tend to make decisions that are more risk-averse or conservative than individual members would make alone.