If the market for products produced by firms in a monopolistically competitive industry becomes ________, then there will be ________ firms and each firm will produce ________ output and charge a ________ price.

Question

Quizplus · Accepted Answer

If the market for products produced by firms in a monopolistically competitive industry becomes smaller, meaning there is a decrease in demand, then there will be fewer firms in the market since some firms will exit due to lower profits. Each remaining firm will produce less output because of the decrease in demand and charge a higher price to maintain their profit level.

If the Market for Products Produced by Firms in a Monopolistically