Monopolistic Competitors in the short run Short-run economic profits encourage new firms to enter the market. This o Increases the number of products offered Reduces demand faced by firms already in the market e Incumbent firms demand curves shift to the left ● Demand for the incumbent firms′ products fall, and their profits decline
• Short-run economic profits encourage new firms to enter the market. This: • Increases the number of products offered. • Reduces demand faced by firms already in the market. • Incumbent firms’ demand curves shift to the left. • Demand for the incumbent firms’ products fall, and their profits decline. Monopolistic Competitors in the Short Run
Monopolistic competitors in the short run o Short-run economic losses encourage firms to exit the market This Decreases the number of products offered Increases demand faced by the remaining fi rms Shifts the remaining firms' demand curves to the right e Increases the remainin g firms' profits
• Short-run economic losses encourage firms to exit the market. This: • Decreases the number of products offered. • Increases demand faced by the remaining firms. • Shifts the remaining firms’ demand curves to the right. • Increases the remaining firms’ profits. Monopolistic Competitors in the Short Run