When Firms Exit a Monopolistically Competitive Industry

question 115

Multiple Choice

When firms exit a monopolistically competitive industry:

• A) the average total cost curves of remaining firms will shift upward.
• B) the demand curves of remaining firms are decreased at each level of output.
• C) the remaining firms will decrease production.
• D) the average revenue received by remaining firms will increase at each level of output.

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Definitions:

Direct Liability

Liability that is attributed to an individual or entity due to their own actions or negligence, not through the actions or negligence of others.

Respondeat Superior

A legal doctrine that holds employers or principals responsible for the actions of their employees or agents, conducted within the scope of their employment or agency.

Liability

The state of being responsible for something, especially in terms of legal or financial obligations.

Express Authority

is explicitly granted permission or power given to an agent or representative by a principal or employer to act on their behalf.