If new firms enter a monopolistically competitive market,the demand curves for the existing firms will

Question

Quizplus · Accepted Answer

When new firms enter a monopolistically competitive market, it increases the number of substitutes for consumers to choose from. This leads to a decrease in demand for the existing firms as consumers shift to the new firms. As a result, the demand curves for the existing firms will shift to the left.

If New Firms Enter a Monopolistically Competitive Market,the Demand Curves