If firms in a monopolistically competitive market are incurring economic losses, which of the following statements describes the changes that occur as the market adjusts to the long-run equilibrium?
a. Each existing firm's demand curve shifts to the right.
b. More firms exit the market.
c. Each firm eliminates its excess capacity.
d. Both a and b are correct.
d
Economics
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Minimum-price laws designed to preserve competition
A) offer the certainty of lower prices in order to eliminate the possibility of higher prices. B) offer the certainty of higher prices in order to eliminate the possibility of higher prices. C) offer the possibility of higher prices in order to eliminate the certainty of higher prices. D) offer the sellers more competition among themselves.
Economics
Discretionary economic policy is not beneficial in the ________
A) traditional Keynesian theory B) new Keynesian theory C) Luka Brazzi model D) real business cycle theory
Economics