In monopolistic competition if there is profit, there is:
A) a signal for new firms to enter.
B) a motive for existing firms to increase prices.
C) proof that advertising works.
D) a motive for existing firms to decrease prices.
E) product differentiation.

Question

Quizplus · Accepted Answer

In monopolistic competition, profits attract new firms to enter the market, increasing competition and potentially reducing profits over time.

In Monopolistic Competition If There Is Profit, There Is