If some firms leave a monopolistic competitive market, the
A) remaining firms will charge a lower price to try to capture the released market share
B) remaining firms' cost curves will shift upward and to the right
C) remaining firms' demand curves will shift to the left
D) market demand curve shifts to the right
E) remaining firms will produce at a different point on their ATC curves

Question

Quizplus · Accepted Answer

When firms exit a monopolistic competitive market, the remaining firms face less competition, which can lead to an increase in demand for their products. This can cause them to produce at a different point on their Average Total Cost (ATC) curves, potentially moving towards a more efficient scale of production.

If Some Firms Leave a Monopolistic Competitive Market, the