If a Firm in Monopolistic Competition Lowers Its Price, What

question 50

Multiple Choice

If a firm in monopolistic competition lowers its price, what will
Happen to the quantity of products it sells?

• A)The quantity of products sold will increase and sales revenue will fall.
• B)The quantity of products sold will decrease because this is not perfect competition.
• C)The quantity of products sold will increase slightly-and in some cases not at all.
• D)The quantity of products sold and sales revenues will increase as the firm lures customers from its competitors and attracts
• New customers.

---

Definitions:

Social Psychology

Research into how the presence, whether real, imagined, or alluded to, of other individuals influences one's thoughts, feelings, and behavior patterns.

Narcissists

Individuals who have an inflated sense of their own importance, a deep need for excessive attention and admiration, coupled with a lack of empathy for others.

Max Ringelmann

A psychologist known for identifying the Ringelmann effect, which describes the tendency for individual productivity to decrease as group size increases.

Group Size

The number of individuals forming a social or organizational unit, which can influence dynamics, communication, and effectiveness.