When New Firms Are Encouraged to Enter a Monopolistically Competitive

question 35

Multiple Choice

When new firms are encouraged to enter a monopolistically competitive market,

• A)some existing firms must be earning economic profits.
• B)they do so because there is insufficient product differentiation.
• C)the demand curve facing an existing firm shifts to the right.
• D)the marginal cost curve facing an existing firm shifts downwards.

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Definitions:

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