Multiple Choice
Assume that economic profits are earned by monopolistically competitive firms. What will happen in the long run?
A) New firms enter, the market demand rises, and the price for each firm falls until normal profits occur.
B) New firms enter, the market supply rises, and the price for each firm falls until P = MC for each firm.
C) New firms enter and demand for each firm's product rises until economic profits are eliminated.
D) New firms enter and demand for each firm's product falls until economic profits are zero.
Correct Answer:
Verified
Correct Answer:
Verified
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