In a monopolistically competitive scenario,the demand curve for an existing firm ____ when firms exit the industry.
A) becomes more inelastic
B) becomes vertical
C) becomes horizontal
D) becomes more elastic

Question

Quizplus · Accepted Answer

When firms exit the industry, the demand curve for an existing firm becomes more inelastic because there are fewer substitutes available, leading to less sensitivity to price changes.

In a Monopolistically Competitive Scenario,the Demand Curve for an Existing