What Is the Result When New Firms Are Encouraged to Enter

question 251

Multiple Choice

What is the result when new firms are encouraged to enter a monopolistically competitive market?

• A)Some existing firms must be earning economic profits.
• B)They do so because there is insufficient product differentiation.
• C)The demand curve facing an existing firm shifts to the right.
• D)The marginal cost curve facing an existing firm shifts downwards.

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