Suppose some firms exit an industry characterized by monopolistic competition. We would expect the demand curve of a firm already in the industry to

Question

Quizplus · Accepted Answer

When firms exit an industry characterized by monopolistic competition, the remaining firms will likely see an increase in demand for their products as there are fewer substitutes available. This leads to a rightward shift in the demand curve for firms still in the industry.

Suppose Some Firms Exit an Industry Characterized by Monopolistic Competition