In monopolistic competition: a.firms advertise to increase demand for their product. b.entry of new firms shifts...
In monopolistic competition:
a.firms advertise to increase demand for their product.
b.entry of new firms shifts the demand curve for existing firms to the right.
c.when some firms exit, the demand curve for the firms that remain in the industry shifts to the left.
d,firms earn large economic profits in the long run.
Homework Answers
Option A
Explanation: In monopolistic competition, firms sell differentiated products and they use advertising to help in creating product differentiation.
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In monopolistic competition:
a.firms advertise to increase demand for their product.
b.entry of new firms shifts...
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