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Question
If firms in a monopolistically competitive industry experience short-run losses,
A) some firms would like to exit the industry but find they cannot.
B) firms increase prices further, until they make at least a normal return.
C) firms increase advertising spending to increase demand, until they make at least a normal return.
D) some firms exit the industry, causing the demand curves for the remaining firms to shift to the right until they earn a normal profit.
Answer
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