Which of the following forces does not play a major part in the adjustments of a monopolistically competitive industry toward its long-run equilibrium?
A) profits/losses making firms enter or exit the industry
B) firms expanding or shrinking their productive capacity
C) introduction of new products and patents
D) shifts in the demand curves of individual firms as the industry expands or contracts

Question

Quizplus · Accepted Answer

The introduction of new products and patents is actually a major factor in the adjustments of a monopolistically competitive industry toward its long-run equilibrium. Profits/losses making firms enter or exit the industry, firms expanding or shrinking their productive capacity, and shifts in the demand curves of individual firms as the industry expands or contracts are all important factors that contribute to the long-run equilibrium of a monopolistically competitive industry.

Which of the Following Forces Does Not Play a Major