Asked by Cassandra Myers on Jul 21, 2024
Verified
If some firms leave a monopolistically competitive industry,the demand curves of the remaining firms will:
A) be unaffected.
B) shift to the left.
C) become more elastic.
D) shift to the right.
Demand Curves
Graphical representations of the relationship between the price of a good and the quantity demanded by consumers at various prices.
Elastic
Describes a situation where the quantity demanded or supplied changes significantly when the price changes.
- Describe the process and consequences of market entry and exit in the short and long run.
Verified Answer
DD
david delaneyJul 23, 2024
Final Answer :
D
Explanation :
If some firms leave a monopolistically competitive industry, the remaining firms will face less competition, which means that they will have a larger market share. As a result, the demand curves of the remaining firms will shift to the right. This can lead to increased profits for the remaining firms in the short run, but in the long run, new firms are likely to enter the industry, causing the demand curves to become more elastic again.
Learning Objectives
- Describe the process and consequences of market entry and exit in the short and long run.
Related questions
Which of the Following Statements Concerning a Monopolistically Competitive Industry ...
A Competitive Market Will Typically Experience Entry and Exit Until ...
In the Long Run, When Price Is Greater Than Average ...
In the Long Run, When Price Is Less Than Average ...
The Stable, Long-Run Equilibrium in a Competitive Market Occurs When ...