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Figure 8.4 -Figure 8.4 Depicts Demand and Costs for a Monopolistically Competitive

Question 106

Multiple Choice

Figure 8.4 -Figure 8.4 depicts demand and costs for a monopolistically competitive firm. If the firm's demand curve shifts to the left as more firms enter the market A) the firm's average cost will be higher at the new profit maximizing output level. B) the firm's average cost will be lower at the new profit maximizing output level. C) the firm's average cost will remain the same at the new profit maximizing output level. D) There is not sufficient information. Figure 8.4
-Figure 8.4 depicts demand and costs for a monopolistically competitive firm. If the firm's demand curve shifts to the left as more firms enter the market


A) the firm's average cost will be higher at the new profit maximizing output level.
B) the firm's average cost will be lower at the new profit maximizing output level.
C) the firm's average cost will remain the same at the new profit maximizing output level.
D) There is not sufficient information.

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