If new firms enter a monopolistically competitive industry, what happens to the demand for the product made by an existing firm? a Demand will increase and become more inelastic. b Demand will increase and become more elastic. c Demand will decrease and become more inelastic. d Demand will decrease and become more elastic.
If new firms enter a monopolistically competitive industry, what happens to the demand for the product made by an existing firm? a Demand will increase and become more inelastic. b Demand will increase and become more elastic. c Demand will decrease and become more inelastic. d Demand will decrease and become more elastic.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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If new firms enter a monopolistically competitive industry, what happens to the demand for the product made by an existing firm?
a
Demand will increase and become more inelastic.
b
Demand will increase and become more elastic.
c
Demand will decrease and become more inelastic.
d
Demand will decrease and become more elastic.
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