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If Firms Are Able to Freely Enter and Exit a Monopolistically

Question 69

Multiple Choice

If firms are able to freely enter and exit a monopolistically competitive industry,then we can predict


A) a negatively sloped demand curve for the industry.
B) strategic behaviour with regard to other firms in the industry.
C) brand proliferation.
D) zero profits in long-run equilibrium.
E) that exit will occur until no firm has excess capacity.

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