- Refer to Figure 26.4 for a monopolistically competitive firm.If the firm currently faces Demand₁ and MR₁,then it will earn A)A positive economic profit,and firms will enter the industry. B)A negative economic profit,and firms will enter the industry. C)A negative economic profit,and firms will exit the industry.

Question

Quizplus · Accepted Answer

If the firm faces Demand1 and MR1, it is likely operating at a loss, leading to negative economic profit, prompting firms to exit the industry.