The Figure Below Shows the Revenue and Cost Curves of a Monopolistically

question 82

Multiple Choice

The figure below shows the revenue and cost curves of a monopolistically competitive firm.Figure: 12.2
In the figure,
D: Demand curve
MR: Marginal revenue curve
ATC₁ and ATC₂: Average total cost curves
MC: Marginal cost curve
-If economic losses exist in a monopolistically competitive market,

• A)new products will be introduced.
• B)new firms will enter the market because they see potential for profit in the future.
• C)firms will exit the market and the existing firms' demand curves will shift to the left.
• D)the average total cost curve must lie below the demand curve.
• E)firms will exit the market and existing firms' demand curves will shift to the right.

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Definitions:

Considerable Assortment

A large variety of products or services that a business offers, ensuring that consumer preferences and needs are met.

Beauty and Personal Care

Products and services aimed at enhancing physical appearance and maintaining personal hygiene.

Intertype Competition

Competition between very dissimilar types of retail outlets that results from a scrambled merchandising policy.

Scrambled Merchandising

Offering several unrelated product lines in a single store.