As new firms enter a monopolistically competitive industry, the ________ curve facing each existing firm will shift to the left and become more elastic because there are now ________ substitutes for its product.

Question

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In a monopolistically competitive market, as more firms enter the industry, each existing firm faces more competition because there are more substitutes available for its product. This increases the elasticity of the demand curve for each firm's product, as consumers have more alternatives, and shifts the demand curve to the left, indicating a decrease in demand for each existing firm's product at any given price.

As New Firms Enter a Monopolistically Competitive Industry, the ________