If a monopolistically competitive firm is earning profits in the short run: Multiple Choice the entry of competing firms will cause price to drop, but not affect the firm's demand curve. the entry of competing firms will cause price to rise, but not affect the firm's demand curve. the entry of competing firms will shift the firm's demand to the left. the entry of competing firms will shift the firm's demand to the right.


Answer:

the entry of competing firms will shift the firm's demand to the left

Explanation:

If a monopolistically competitive firm is earning a profit in the short then as a result this will induces the new firms to enter into the market and earn a profit. So, the entry of the new firms will increase the overall competition among the firms. Therefore, the demand for each firm's product decreases and this will shift the demand curve for firm's product leftwards.


Rate answer
Wrong answer?

If your question is not fully disclosed, then try using the search on the site and find other answers on the subject Business.

Find another answers

Load image