As new firms enter a monopolistic competitive industry, it can be expected that:

Name: As new firms enter a monopolistic competitive industry, it can be expected that:
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Question

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As new firms enter a monopolistic competitive industry, the supply curve of the industry will shift rightward, increasing the level of competition. As a result, existing firms will have to reduce their prices to remain competitive, reducing their profits. Therefore, profits of existing firms will decrease.

As New Firms Enter a Monopolistic Competitive Industry, It Can