Table 16-7 a Monopolistically Competitive Firm Faces the Following Demand Schedule for Schedule

Table 16-7
A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to $10.

-Refer to Table 16-7.If the firm has a constant marginal cost of $5 per unit,which of the following would you expect to occur in the long run in this market?

A) New firms will enter the market and profits for firms in the market will fall.
B) New firms will enter the market and profits for firms in the market will rise.
C) Firms will leave the market and profits for firms that remain in the market will rise.
D) Firms will leave the market and profits for firms that remain in the market will fall.

Correct Answer:

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