Suppose a Monopolistically Competitive Industry Evolved into a Perfectly Competitive

question 124

Multiple Choice

Suppose a monopolistically competitive industry evolved into a perfectly competitive industry.Which of the following statements is correct?

• A) The industry would produce more output and charge a lower price after the change.
• B) The industry would produce at decreasing returns to scale.
• C) Elasticity of demand for the firm's product would remain the same after this change occurred.
• D) This industry would produce the same level of output at lower prices in the long run than before the change.

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Definitions:

French Gothic

An architectural style that evolved in France in the 12th century, characterized by pointed arches, ribbed vaults, and flying buttresses.

Salisbury Cathedral

A historic Anglican cathedral in Salisbury, England, known for having the tallest church spire in the UK and its early English Gothic architecture.

Pointed Arches

An architectural element characteristic of Gothic style, featuring arches with pointed apexes, which allowed for higher structures and larger windows.

Naumburg Master

A term used to describe an unidentified German sculptor or group of sculptors of the 13th century, famous for their work in the Naumburg Cathedral.