Reference: Ref 15-9 (Figure: Monopolistic Competition) Refer to the Figure

question 48

Multiple Choice

Reference: Ref 15-9 (Figure: Monopolistic Competition) Refer to the figure. Suppose the figure represents a firm that operates in a monopolistic competitive market. In this market in the long run you would expect:

• A) both demand and price to stay the same.
• B) both demand and price to increase as unprofitable firms leave the industry.
• C) demand to decrease and price to fall to the point that P = AC.
• D) demand to shift left and decrease price to the point that P = MC.

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