Multiple Choice
Refer to Figure 26.4 for a monopolistically competitive firm.If the firm currently faces Demand2 and MR2,then it will earn
A) A positive economic profit,and firms will enter the industry.
B) A positive economic profit,and firms will exit the industry.
C) A negative economic profit,and firms will exit the industry.
D) Zero economic profit,and neither entry nor exit will occur.
Correct Answer:
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