Figure 16-8
The lines in the figures below illustrate the potential effect of entry and exit in a monopolistically competitive market on either the demand curve or the marginal cost curve of existing firms.
-Refer to Figure 16-8. Which of the diagrams illustrates the impact of some existing firms leaving the market?
A)panel a
B)panel b
C)panel c
D)panel d

Question

Figure 16-8
The lines in the figures below illustrate the potential effect of entry and exit in a monopolistically competitive market on either the demand curve or the marginal cost curve of existing firms. 
-Refer to Figure 16-8. Which of the diagrams illustrates the impact of some existing firms leaving the market?
A)panel a 
B)panel b 
C)panel c 
D)panel d

Quizplus · Accepted Answer

Panel c illustrates the impact of some existing firms leaving the market, as it shows a decrease in supply, leading to a leftward shift of the supply curve.

Figure 16-8 The Lines in the Figures Below Illustrate the Potential Effect