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Exhibit 10-16 -Consider the Situation Depicted for the Monopolistically Competitive Firm in Competitive

Question 227

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Exhibit 10-16 Exhibit 10-16 -Consider the situation depicted for the monopolistically competitive firm in Exhibit 10-16. What would you expect to happen in this market in the long-run? A) exit of resources will occur and this firm's demand curve will shift out leading to a higher price B) exit of resources will occur and this firm's demand curve will shift out leading to a lower price C) nothing will happen the industry is in long-run equilibrium D) entry of new resources will occur and this firm's demand curve will shift in leading to a lower price E) entry of new resources will occur and this firm's demand curve will shift in leading to a higher price
-Consider the situation depicted for the monopolistically competitive firm in Exhibit 10-16. What would you expect to happen in this market in the long-run?


A) exit of resources will occur and this firm's demand curve will shift out leading to a higher price
B) exit of resources will occur and this firm's demand curve will shift out leading to a lower price
C) nothing will happen the industry is in long-run equilibrium
D) entry of new resources will occur and this firm's demand curve will shift in leading to a lower price
E) entry of new resources will occur and this firm's demand curve will shift in leading to a higher price

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