The Model of Monopolistic Competition Characterizes the Market for Plumbing

question 69

Multiple Choice

The model of monopolistic competition characterizes the market for plumbing services in a city.This market is initially in long-run equilibrium,but then there is an increase in market demand for plumbing services.We expect that in the long run:

• A)firms will leave the plumbing market.
• B)there will be a short-run increase in the number of firms,but then the number will return to the original level.
• C)new firms will enter the plumbing market.
• D)firms will shut down,but they will not leave the industry.

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Definitions:

Market Research

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