Suppose That a Monopolistically Competitive Firm Decides to Raise Its

Multiple Choice

Suppose that a monopolistically competitive firm decides to raise its price.The theory of monopolistic competition predicts that

A) this firm would lose some,but not all of its customers.
B) this firm would increase its profits.
C) this firm would lose all of its customers.
D) increasing the price has no effect on profits.
E) a large loss of customers as the demand facing the firm is quite inelastic.