The figure above shows a firm in monopolistic competition. If all firms in the industry have the demand and cost curves illustrated in the figure, then in the long run
A) some firms will have exited the industry.
B) some firms will have entered the industry.
C) firms will have neither entered nor exited the industry.
D) we cannot tell if firms will either have entered or exited the industry.
A
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The increase in spending that occurs because the real value of money increases when the price level falls is known as the
A) price effect. B) wealth effect. C) interest rate effect. D) international trade effect.
A minimum wage set above the equilibrium wage rate for low-skilled workers ________
A) creates more employment opportunities for low-skilled workers B) creates more prosperity among younger people C) creates unemployment among low-skilled workers D) increases the number of good paying jobs available to young people