If a Monopolistically Competitive Firm Is Making Profits

question 121

Multiple Choice

If a monopolistically competitive firm is making profits

• A)it can be assured of high profits for all time to come.
• B)the entrance of new firms decreases the demand facing the firm,thereby reducing profits.
• C)the entrance of new firms increases the demand facing the firm,thereby reducing profits.
• D)the entrance of new firms increases costs,thereby reducing profits.

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Definitions:

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