Reference: Ref 15-9 (Figure: Monopolistic Competition) Refer to the Figure

Multiple Choice

Reference: Ref 15-9 (Figure: Monopolistic Competition) Refer to the figure. Suppose the figure represents a firm that operates in a monopolistic competitive market. In this market in the long run you would expect:

A) both demand and price to stay the same.
B) both demand and price to increase as unprofitable firms leave the industry.
C) demand to decrease and price to fall to the point that P = AC.
D) demand to shift left and decrease price to the point that P = MC.