If a monopolistically competitive firm raises its price,it _____

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Monopolistically competitive firms face a downward-sloping demand curve, meaning that as they raise their price, they will lose some, but not all, of their customers. This is because consumers have some level of substitutability with other firms in the market. Therefore, raising prices will not necessarily result in higher economic profit, and it is unlikely to result in gaining customers. The firm may choose to shut down if it cannot cover its costs at a higher price, but this is not the most likely outcome. Taxes are not directly affected by a firm's pricing decisions.

If a Monopolistically Competitive Firm Raises Its Price,it _____