The Figure Given Below Shows the Revenue and Cost Curves

question 32

Multiple Choice

The figure given below shows the revenue and cost curves of a monopolistically competitive firm. Figure 11.4 MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
Assume that the firm in Figure 11.4 is monopolistically competitive.In the long run, we would expect:

• A)the price of the firm's output to increase.
• B)entry of new firms because economic profits are positive.
• C)exit of few existing firms because economic profits are negative.
• D)the firm's demand curve to shift outward.
• E)the firm's demand curve to becomes less elastic.

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Definitions:

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