Refer to Figure 12-10. At the profit-maximizing output level, the firm earns

A decrease in the number of competitors in a monopolistically competitive market causes an increase in the price elasticity of demand for the output of each of the remaining firms in the market

Indicate whether the statement is true or false

Which of the following situations generally exists when deflation occurs?

A) Inflation and unemployment are both increasing. B) Inflation and unemployment are both decreasing. C) The price level is decreasing. D) The rate of inflation is falling from, for example, 10% to 3%. E) The natural rate of unemployment is zero.