The model of monopolistic competition can characterize the market for plumbing services in a city.Suppose that the market is initially in long-run equilibrium, and then there is an increase in demand for plumbing services.We expect that in the short run:
A) the price and output of plumbing services will fall.
B) the price and output of plumbing services will remain unchanged.
C) the price and output of plumbing services will rise.
D) the price of plumbing services will rise and the output will fall.
Correct Answer:
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Q93: Figure: Profits in Monopolistic Competition 
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