Through the process of exit, monopolistically competitive firms remaining in the market
A) are no longer earning zero economic profits.
B) will each have ongoing negative earnings.
C) are no longer earning losses.
D) have positive earnings.

Question

Quizplus · Accepted Answer

When firms exit a monopolistically competitive market, the remaining firms no longer earn losses, as the reduction in supply increases prices and allows them to cover their costs.

Through the Process of Exit, Monopolistically Competitive Firms Remaining in the Market