Suppose That Firms in a Monopolistically Competitive Industry Are Earning

question 220

Multiple Choice

Suppose that firms in a monopolistically competitive industry are earning positive economic profits.In this situation, you would expect

• A)the number of firms in the market to increase.
• B)each firm will experience an increase in its demand.
• C)there is a downward shift in the firm's average cost curve.
• D)to observe firms reducing their advertising.

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Definitions:

Officers

Individuals appointed or elected to manage and oversee the daily operations of a corporation, often holding specific titles such as CEO, CFO, or President.

Proxy

A person authorized to act on behalf of another, or the authority to represent someone else, especially in voting.

Shareholder

An individual or entity that owns one or more shares of stock in a corporation, thus having an interest in its performance and governance.

Authorization

Official permission or approval for an action.