Figure 8.4 depicts demand and costs for a monopolistically competitive firm. If the firm's demand curve shifts to the left as more firms enter the market:
A. the firm's average cost will be higher at the new profit-maximizing output level.
B. the firm's average cost will be lower at the new profit-maximizing output level.
C. the firm's average cost will remain the same at the new profit-maximizing output level.
D. There is not sufficient information.
Answer: A
Economics
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