Which of the Following Statements Concerning a Monopolistically Competitive Industry

question 23

Multiple Choice

Which of the following statements concerning a monopolistically competitive industry is correct?

• A) If there are short-run losses, firms will leave the industry and the demand curves of the remaining firms will shift to the right.
• B) If there are short-run economic profits, firms will enter the industry and the demand curves of existing firms will shift to the right.
• C) If there are short-run losses, firms will leave the industry and the demand curves of the remaining firms will shift to the left.
• D) If there are short-run economic profits, firms will leave the industry and the demand curves of the remaining firms will shift to the right.

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Definitions:

One Percent

Often refers to the segment of the population that holds a disproportionately large share of wealth and economic power.

Security Interest

A legal right or claim on assets granted to a creditor to secure the repayment of a debt or obligation.

Perfection

The process of securing a security interest against third parties, especially in relation to secured transactions.

Secured Party

A lender or seller who holds a security interest.