When Firms in Monopolistic Competition Are Making an Economic Profit,firms

question 194

Multiple Choice

When firms in monopolistic competition are making an economic profit,firms will

• A) enter the industry, and demand will increase for the original firms.
• B) exit the industry, and demand will increase for the firms that remain.
• C) exit the industry, and demand will decrease for the firms that remain.
• D) enter the industry, and demand will decrease for the original firms.
• E) enter the industry and then will exit the industry.

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Definitions:

Fundamental Breach

A severe violation of a contract that allows the aggrieved party to terminate the agreement and possibly seek damages.

Strict Interpretation

The judicial practice of applying a narrow, literal, and precise reading of legal texts or statutes.

Force Majeure Clause

A contract term anticipating some catastrophic event usually exempting liability when such an event interferes with performance of the contract.

Catastrophic Event

An unexpected, large-scale disaster that causes significant -physical, economical or environmental damage or loss of life.