Refer to Figure 17-6. In response to the situation represented by the figure, we would expectGroup of answer choicesnew firms to enter the market.the demand for this firm's product to decrease, assuming this firm does not exit.this firm's profit to remain the same.some of the firms that are currently in the market to exit.

In perfect competition, if the market price of the product is initially higher than the minimum average total cost faced by the firms, thenMultiple Choicesome firms will exit the industry and the industry supply will decrease.other firms will enter the industry and the industry supply will increase.some firms will exit the industry and the industry supply will increase.other firms will enter the industry and the industry supply will decrease.

In monopolistically competitive markets, economic losses:Group of answer choicessignal new firms to enter, which shifts the demand curve of the remaining firms to the left.signal new firms to enter, which shifts the supply curve of the remaining firms to the left.signal new firms to enter, which shifts the demand curve of the remaining firms downwards.signal some incumbent firms to exit, which shifts the supply curve of the remaining firms upwards.signal some incumbent firms to exit, which shifts the demand curve of the remaining firms to the right.

If a perfectly competitive firm is facing a situation where the price of its product is lower than the average total cost, which of the following statements is true?Multiple ChoiceOther firms will want to enter the industry because of the economic profits generated by the firm.The firm may be earning some accounting profits, but less than what it could earn elsewhere.The firm is generating a loss, and if things are not expected to improve the firm will leave the industry.The firm may earn economic profits in the long run if it expands its plant in order to exploit economies of scale.

Suppose some firms exit an industry characterized by monopolistic competition. We would expect the demand curve of a firm already in the industry toMultiple Choiceshift to the left.shift to the right.become less elastic.remain the same since entering firms serve other customers in the market.

If firms in a competitive market are making positive economic profits, you would expect firms to __________ the market, causing the market __________ curve to shift to the __________.Group of answer choicesenter; demand; leftleave; supply; leftenter; supply; rightenter; demand; rightenter; supply; left