Figure 8.3 -Figure 8.3 Shows Demands and Costs for a Monopolistically Competitive

question 241

Multiple Choice

Figure 8.3
-Figure 8.3 shows demands and costs for a monopolistically competitive firm. When the firm's demand curve shifts from D₁ to D₂ and to D₃, in the long run we would expect

• A) the firm to earn a zero economic profit.
• B) the firm to charge a price equal to its marginal cost.
• C) the firm to increase its output level.
• D) the firm to produce at the lowest average cost.

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