Questions Bank | Page 139353

When firms in monopolistic competition make an economic profit,

firms enter the industry, which increases demand for the product of the firms originally in the market.

❌

firms exit the industry, and demand increases for the products of the firms that remain.

❌

eventually the market will become a monopoly.

❌

firms enter the industry, and demand decreases for the firms that were originally in the industry.

✅

firms exit the industry, and demand decreases for the firms that remain in the industry.

❌

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