Under the Model of Monopolistic Competition,a(an)_ in the Number of Firms

question 25

Multiple Choice

Under the model of monopolistic competition,a(an) _ in the number of firms in the industry will cause to .

• A)increase; marginal cost; decrease
• B)increase; markup; decrease
• C)increase; average cost; decrease
• D)decrease; markup; decrease
• E)increase; average price; increase

---

Definitions:

Political Goods

Services or benefits, such as security and safety, provided by a government to its citizens, which are non-exclusive and cannot be easily provided by the private sector.

Coercive Force

The use or threat of force to persuade someone to act in a certain way, often seen in legal or military contexts.

Private Firms

Businesses owned by private individuals or groups, as opposed to being publicly traded or government-owned.

Subsidies

Financial support extended by the government to companies, farmers, or consumers, often aimed at encouraging certain behaviors or reducing the price of essential goods.