Answered: Economics Fixed costs do not play a…

Economics Fixed costs do not play a role in determining output levels. So, why will lower fixed costs increase the number of firms in a monopolistic competitive industry?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 2E

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Economics
Fixed costs do not play a role in determining
output levels. So, why will lower fixed costs
increase the number of firms in a monopolistic
competitive industry?

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