In the model of monopolistic competition, an increase in industry output will ________ market shares and ________ profits of producers of higher-priced goods and will ________ market shares and ________ profits of producers of lower-priced goods.

Question

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In monopolistic competition, an increase in industry output typically leads to reduced market shares and profits for producers of higher-priced goods due to increased competition. Conversely, producers of lower-priced goods may see increased market shares and profits as consumers shift towards more affordable options.

In the Model of Monopolistic Competition, an Increase in Industry