If a typical monopolistically competitive firm is making short-run losses, then
A) as some firms leave, the demand for the products of the remaining firms will become more elastic.
B) other more competitive firms will enter the market.
C) as some firms leave, the remaining firms will experience an increase in the demand for their products.
D) the industry will eventually cease to exist.
C
You might also like to view...
Suppose the market clearing price for apples rises from $2.00 to $3.00 per pound, and the overall market clearing output decreases from 1 million to 1/2 million pounds. How can we explain the increase in price and decrease in market output?
A) Supply decreased and demand remained unchanged. B) Supply increased and demand remained unchanged. C) Demand increased and supply remained unchanged. D) Demand decreased and supply remained unchanged.
Which of the following will cause a real appreciation?
A) a reduction in E B) a decrease in P C) an increase in P D) none of the above