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:

Semiannual Payments

Payments that are made twice a year, commonly found in the context of bonds or loan agreements.