Refer to the Diagram for a Monopolistically Competitive Firm

question 266

Multiple Choice

Refer to the diagram for a monopolistically competitive firm. If more firms were to enter the industry and product differentiation were to weaken, then

• A)resource misallocation would become more severe.
• B)the demand curve would become more elastic.
• C)firms would begin earning economic profits.
• D)the firm would achieve allocative efficiency.

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