If firms in a monopolistically competitive market are incurring economic losses,which scenario would best reflect the change facing incumbent firms as the market adjusts to its new equilibrium

Question

Quizplus · Accepted Answer

When firms in a monopolistically competitive market are incurring losses, some firms will exit the market, reducing the overall supply. This reduction in supply leads to an increase in demand for the remaining firms, allowing them to raise prices and potentially return to a normal profit in the long run.

If Firms in a Monopolistically Competitive Market Are Incurring Economic