Asked by Cassandra Myers on Jul 21, 2024

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If some firms leave a monopolistically competitive industry,the demand curves of the remaining firms will:

A) be unaffected.
B) shift to the left.
C) become more elastic.
D) shift to the right.

Demand Curves

Graphical representations of the relationship between the price of a good and the quantity demanded by consumers at various prices.

Elastic

Describes a situation where the quantity demanded or supplied changes significantly when the price changes.

  • Describe the process and consequences of market entry and exit in the short and long run.
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Verified Answer

DD
david delaney

Jul 23, 2024

Final Answer :
D
Explanation :
If some firms leave a monopolistically competitive industry, the remaining firms will face less competition, which means that they will have a larger market share. As a result, the demand curves of the remaining firms will shift to the right. This can lead to increased profits for the remaining firms in the short run, but in the long run, new firms are likely to enter the industry, causing the demand curves to become more elastic again.