If Monopolistically Competitive Firms in an Industry Are Making an Economic

question 163

Multiple Choice

If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will

• A) increase.
• B) become less elastic.
• C) not be affected.
• D) decrease.

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Definitions:

Customizing Department

A department within a manufacturing or service firm dedicated to modifying products or services according to customer specifications.

Job T898

A specific reference or identifier for a job or order within a job-order costing system, used for tracking costs and production progress.

Predetermined Overhead Rate

A rate calculated before a production period that estimates the amount of manufacturing overhead cost per unit of allocation base, used to apply overhead costs to goods produced.

Casting Department

A specific section within a manufacturing facility where the process of casting—shaping material by pouring it into a mold and allowing it to solidify—is performed.