In a monopolistically competitive market,the lower the firms' fixed costs,

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, the number of firms in equilibrium is determined by the firms' fixed costs. As the fixed costs decrease, it becomes easier for new firms to enter the market. This leads to an increase in the number of firms in the market and a more competitive market structure. Therefore, the correct answer is (C) the more firms are active in the equilibrium.

In a Monopolistically Competitive Market,the Lower the Firms' Fixed Costs