If firms in a monopolistically competitive industry are operating with positive economic profit, over time we would see
A) firms alter their advertising rates until they made at least normal profits.
B) some firms entering the industry, causing the market supply curve to shift to the right, lowering price.
C) some firms entering the industry, causing the demand curves of the existing firms to shift to the left.
D) some firms entering the industry, causing the demand curves of the existing firms to shift to the right.
Answer: C
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Assuming economic efficiency is maximized, when will more of a resource tend to be used in the first time period (as compared to future time periods)?
a. Whenever the discount rate is positive b. Whenever the marginal net benefits in the present are positive c. Whenever the discount rate is zero d. Whenever the user costs are positive in the present e. Whenever the marginal net benefits in the future are negative
A firm will shut down in the short run if at the profit-maximizing quantity, ___________
A. total revenue is less than total cost B. marginal revenue is less than average fixed cost C. average total cost exceeds the market price D. marginal revenue is less than average variable cost