As new firms enter a monopolistically competitive market, the demand curves facing existing firms will tend to shift left.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, as new firms enter, the variety of products increases, leading to a decrease in demand for the products of existing firms. This is represented by a leftward shift in the demand curves of these existing firms, as consumers now have more options to choose from.

As New Firms Enter a Monopolistically Competitive Market, the Demand