What effect does the absence of barriers to entry in a monopolistically competitive industry have on the existing firms' demand and marginal revenue curves?

Question

Quizplus · Accepted Answer

The absence of barriers to entry in a monopolistically competitive industry means that new firms can easily enter the market, leading to increased competition. This results in a decrease in demand for existing firms' products, as consumers have more options to choose from. As a result, both the demand and marginal revenue curves shift to the left.

What Effect Does the Absence of Barriers to Entry in a Monopolistically