If price increases from $45 to $55, the market quantity supplied increases from 20 units per week to 30 units per week. The price elasticity of supply is

The entry of new firms into a monopolistically competitive market makes the demand curves for the existing firms more elastic

Indicate whether the statement is true or false

Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.

A. D; C B. D; B C. A; B D. B; C