A monopolistically competitive firm earning profits in the short run will find the demand for its product becoming more elastic in the long run because: 1 more substitutes are available because new rivals have entered the market. 2 the price of the product relative to buyers' incomes has increased. 3 consumers have tired of the firm's product. 4 consumers incomes have fallen.
A monopolistically competitive firm earning profits in the short run will find the demand for its product becoming more elastic in the long run because: 1 more substitutes are available because new rivals have entered the market. 2 the price of the product relative to buyers' incomes has increased. 3 consumers have tired of the firm's product. 4 consumers incomes have fallen.
Chapter10: Monopolistic Competition And Oligoply
Section: Chapter Questions
Problem 2SQ
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Question
A monopolistically competitive firm earning profits in the short run will find the demand for its product becoming more elastic in the long run because:
| 1 |
more substitutes are available because new rivals have entered the market.
|
|
| 2 |
the price of the product relative to buyers' incomes has increased.
|
|
| 3 |
consumers have tired of the firm's product.
|
|
| 4 |
consumers incomes have fallen.
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