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Firms will enter a monopolistically competitive industry when there are;a. normal profits. This will shift demand to the left, reducing the market share and the economic profit.b. normal profits. This will shift demand to the right, reducing the market share and the economic profit.c. economic profits. This will shift demand to the left, reducing the market share and the economic profit.d. any profits. This will shift supply to the right, increasing the market share and the profit.
Refer to Figure 22.3 for a perfectly competitive firm. If the market price is $10,
In the long-run, economic theory predicts that a monopolistically competitive firm will:A. earn an economic profit.B. realize all economies of scale.C. equate price and marginal cost.D. have excess production capacity.
