In monopolistic competition, short-run positive economic profits of firms in the market will cause the market demand to expand.
A. True
B. False

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

There are low barriers to entry r exit of firms. So, if a firm is earning economic profit in the short run, in the long run, more firms would enter into the industry.

examples of monopolistic competition are restaurants

In monopolistic competition, short-run positive economic profits of firms in the market will cause the market demand to expand. A. True B. False

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In monopolistic competition, short-run positive economic profits of firms in the market will cause the market demand to expand.
A. True
B. False