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Question
In the above figure, what would happen to the monopolistically competitive industry in the long run?
A) More producers would enter the market, and the share of the market to this firm would fall, which would cause the demand curve to shift leftward until there is zero economic profit.
B) More producers would exit the market, and the share of the market to this firm would fall, which would cause the demand curve to shift leftward until there is zero economic profit.
C) More producers would enter the market, and the share of the market to this firm would rise, which would cause the demand curve to shift rightward until there is zero economic profit.
D) More producers would enter the market, and the share of the market to this firm would fall, which would cause the demand curve to shift leftward until there is negative economic profit.
Answer
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