When exit occurs in a monopolistically competitive industry the
A) perceived demand and marginal revenue curves will shift to the right.
B) perceived demand and marginal revenue curves will shift to the left.
C) perceived demand curve will shift to the left.
D) marginal revenue curve will shift to the left.

Question

Quizplus · Accepted Answer

When exit occurs in a monopolistically competitive industry, the remaining firms face less competition, which increases the demand for their products. This leads to a rightward shift in both the perceived demand and marginal revenue curves for these firms.

When Exit Occurs in a Monopolistically Competitive Industry the