Graph 17-3 Lines in these figures reflect the potential effect of entry and exit in a monopolistically competitive market on the demand and/or marginal cost curves of incumbent firms.
-Refer to Graph 17-3.Panel c in the set of graphs shown depicts the effect on incumbent firms of:

Question

Graph 17-3  Lines in these figures reflect the potential effect of entry and exit in a monopolistically competitive market on the demand and/or marginal cost curves of incumbent firms.
-Refer to Graph 17-3.Panel c in the set of graphs shown depicts the effect on incumbent firms of:

Quizplus · Accepted Answer

Panel c shows a shift in the demand curve to the right, which would occur if a few existing firms exit the market, increasing the market share and demand for the remaining firms. This would result in the incumbent firms experiencing higher prices and profits in the short run.

Graph 17-3 Lines in These Figures Reflect the Potential