If Firms Are Able to Freely Enter and Exit a Monopolistically

question 102

Multiple Choice

If firms are able to freely enter and exit a monopolistically competitive industry,then we can predict

• A)a negatively sloped demand curve for the industry.
• B)strategic behaviour with regard to other firms in the industry.
• C)brand proliferation.
• D)zero profits in long-run equilibrium.
• E)that exit will occur until no firm has excess capacity.

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