Suppose Some Firms Exit an Industry Characterized by Monopolistic Competition

question 279

Multiple Choice

Suppose some firms exit an industry characterized by monopolistic competition. We would expect the demand curve of a firm already in the industry to

• A)shift to the left.
• B)shift to the right.
• C)become less elastic.
• D)remain the same since entering firms serve other customers in the market.

---

Definitions:

Subsist

To sustain or provide for oneself, especially at a basic level.

Well Paying Jobs

Positions that offer a salary higher than the average, providing financial security and benefits.

Welfare

Government-provided support programs designed to ensure the basic living standards of citizens, including healthcare, food assistance, and unemployment benefits.

Food Stamps

A government-issued voucher program designed to help low-income families purchase food, traditionally as part of welfare support.