If a monopolistically competitive firm is suffering losses in the short run, the exit of competing from the market will:

Question

Quizplus · Accepted Answer

When competing firms exit a monopolistically competitive market, the remaining firms face less competition. This typically results in an increase in demand for the products of the remaining firms, as consumers have fewer alternatives. Hence, the demand curve for a firm in such a market would shift to the right.

If a Monopolistically Competitive Firm Is Suffering Losses in the Short