Multiple Choice
Picture the graph. When new firms enter a monopolistically competitive market, the result is a(n)
A) shift to the left of the existing firms' demand curves
B) shift to the right of the existing firms' demand curves
C) more inelastic set of demand curves for the existing firms
D) decrease in market output (the sum of all firms' output)
E) increase in price and decrease in firm's economic profit
Correct Answer:
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