The diagram below shows selected cost and revenue curves for a firm in a monopolistically competitive industry. Price ($) 13 7 FIGURE 11-4 90 Quantity 91 MR D MC LRAC Refer to Figure 11-4. Which of the following best describes this industry if all firms have the same cost and revenue curves and are producing output of q ? O firms are earning positive profits and new firms will enter the industry until all firms are operating at their minimum LRAC O all firms will try to minimize costs and move toward minimum LRAC O firms are incurring losses and firms will exit this industry O firms are earning zero profits and there is no incentive for firms to enter or leave the industry O all firms are earning positive profits and there is no incentive for firms to enter or exit the industry

The diagram below shows selected cost and revenue curves for a firm in a monopolistically competitive industry. Price ($) 13 7 FIGURE 11-4 90 Quantity 91 MR D MC LRAC Refer to Figure 11-4. Which of the following best describes this industry if all firms have the same cost and revenue curves and are producing output of q ? O firms are earning positive profits and new firms will enter the industry until all firms are operating at their minimum LRAC O all firms will try to minimize costs and move toward minimum LRAC O firms are incurring losses and firms will exit this industry O firms are earning zero profits and there is no incentive for firms to enter or leave the industry O all firms are earning positive profits and there is no incentive for firms to enter or exit the industry

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1.1P

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