When Firms Exit a Monopolistically Competitive Industry

question 127

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 increased at each level of output.
• C) the remaining firms will decrease production.
• D) the average revenue received by remaining firms will decrease at each level of output.

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Definitions:

AASB 121

The Australian Accounting Standards Board document that refers to the effects of changes in foreign exchange rates on financial reporting.

Functional Currency

The currency of the primary economic environment in which an entity operates, used in its financial reporting.

Primary Economic Environment

The main economic setting in which a company operates and carries out its operations, often determined by its reporting currency and major market.

Local Overseas Currency

The official money or legal tender used in a country other than one's own, especially in the context of international trade or travel.