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Suppose That Monopolistically Competitive Firms in a Certain Market Are

Question 44

Multiple Choice

Suppose that monopolistically competitive firms in a certain market are earning positive profits.What happens in the transition from this initial situation to a long-run equilibrium


A) The number of firms in the market decreases.
B) Each incumbent firm experiences a decrease in demand for its product.
C) Marginal revenue will increase.
D) Average revenue will increase.

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