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Suppose Wave Detergent Is Sold in a Monopolistically Competitive Market

Question 99

Multiple Choice

Suppose Wave detergent is sold in a monopolistically competitive market. If the price of Wave detergent is currently $6, and the average cost of producing Wave is $4, in the long run we can expect


A) firms to enter the detergent market and sell products similar to Wave, shifting the demand curve for Wave to the left.
B) firms to enter the detergent market and sell product similar to Wave, shifting the demand curve for Wave to the right.
C) the producers of Wave to go out of business.
D) the producers of Wave to earn economic profits greater than zero.

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