If the Number of Firms in a Monopolistically Competitive Industry

question 6

Multiple Choice

If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes,

• A) the likelihood of realizing economic profits in the long run would be enhanced.
• B) individual firms would now be operating at outputs where their average total costs would be higher.
• C) the industry would more closely approximate pure competition.
• D) the likelihood of collusive pricing would increase.

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Money, time, or resources given to support a cause, organization, or project.

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Regular payments made once a month, often in the context of repaying loans or mortgages.

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The action of receiving something from another party with the intention of returning it or its equivalent at a later date.

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A series of equal payments made at regular intervals over a specified period of time, with interest compounding at the end of each period.