If firms are entering an industry that is monopolistically competitive, we would expect
A.
the demand for existing firms to shift rightward.
B.
the market price of the product to increase.
C.
the demand for existing firms to become more inelastic.
D.
economic profits to rise for all firms.
E.
the demand for existing firms to shift leftward.
Exam No： AP Micro Practice Test 4 Year：2024 Question No：43
Answer:
E
Knowledge points:
2.1 Demand
3.6 Firms’ Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit a Market
4.4 Monopolistic Competition
Solution:
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