When new firms enter a monopolistically competitive industry,ceteris paribus,the
A)Market price decreases.
B)Market price increases.
C)Market price remains unchanged.
D)Change in market price cannot be determined based on the information given.

Question

Quizplus · Accepted Answer

When new firms enter a monopolistically competitive industry, the increased competition typically leads to a decrease in market price as each firm tries to attract customers by offering lower prices or better products.

When New Firms Enter a Monopolistically Competitive Industry,ceteris Paribus,the