Asked by Michelle Martin on Apr 24, 2024
Verified
(Figure: Monopolistic Competition III) Use Figure: Monopolistic Competition III.The figure shows the demand,marginal revenue,marginal cost,and average total cost curves for Pat's Pizza Parlor,a monopolistic competitor in the food-to-go industry.In the long run,the demand curve for Pat's Pizza Parlor will shift to the _____ as competitors _____ the market.
A) right;enter
B) right;leave
C) left;enter
D) left;leave
Monopolistic Competition
A market structure characterized by many firms selling products that are substitutes but differentiated from each other in some way.
Demand Curve
A graph showing the relationship between the price of a good and the quantity of that good that buyers are willing to purchase at various prices.
Marginal Revenue
The increase in revenue that results from the sale of one additional unit of output.
- Understand how entry and exit of firms in monopolistically competitive markets affect the market structure and individual firms.
Verified Answer
ZK
Zybrea KnightMay 02, 2024
Final Answer :
C
Explanation :
In the long run, as competitors enter the market, the demand for Pat's Pizza Parlor will decrease because consumers will have more options to choose from. This leads to a leftward shift in the demand curve.
Learning Objectives
- Understand how entry and exit of firms in monopolistically competitive markets affect the market structure and individual firms.