Which of the following will happen if some firms in a monopolistically competitive market incur losses in the short run and the market conditions are not expected to change?

A) The existing firms will continue production in the long run.
B) The demand for the goods produced by the firms will decrease.
C) New firms will enter the industry in the long run.
D) Some firms will exit the industry in the long run.

D

Economics

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Normative economics

A) predicts the consequences of alternative actions. B) answers the question "What ought to be?" C) answers the question "What is?" D) is the focus of most modern economic reasoning.

Economics

Assume that the required reserve ratio is 10%. An increase of $1,000 in the banking system's excess reserves may result in a total expansion of new deposits for the banking system as a whole by as much as

A) $1,000. B) $9,000. C) $10,000. D) $100,000.

Economics