When a New Firm Enters a Monopolistically Competitive Market,what Will

question 66

Multiple Choice

When a new firm enters a monopolistically competitive market,what will happen to the individual demand curves faced by all existing firms in that market

• A)They will shift to the left.
• B)They will shift to the right.
• C)They will remain unchanged, but the quantity demanded will increase.
• D)They will remain unchanged, but the quantity demanded will decrease.

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Definitions:

Restraint On Trade

Legal concept that refers to practices that limit free trading and competition between businesses.

Illegal

Activities or actions that are prohibited by law or statute and subject to penalties or sanctions.

Oligopolistic

Pertaining to a market structure characterized by a small number of firms controlling a large portion of the market share.

Market Structure

The organizational and other characteristics of a market that influence the nature of competition and pricing, such as the number of firms, product uniformity, and ease of entry.