When Firms Exit a Monopolistically Competitive Market

question 1

Multiple Choice

When firms exit a monopolistically competitive market:

• A) product variety diminishes.
• B) prices fall.
• C) profits decrease (losses increase).
• D) the demand curves of established firms shift to the right.

---

Definitions:

Epiglottis

Structure that covers the glottis, the air-tract opening, during the process of swallowing.

Bronchioles

The small passages in the lungs that lead from the bronchi to the alveoli, involved in the process of breathing.

Saliva

A clear liquid secreted by the salivary glands in the mouth, containing enzymes that aid in the digestion of carbohydrates and serve as a lubricant for food.

Diaphragm Muscle

A large, dome-shaped muscle located at the base of the lungs and chest cavity that plays a key role in breathing.