One prediction of the model of monopolistic competition isthat One prediction of

Question

One prediction of the model of monopolistic competition isthat One prediction of the model of monopolistic competition isthat barriers toentry will enable firms to have positive profits in the longrun. the number offirms will decline over time as a result of economies ofscale. eventually allfirms in the market will shut down. firms will havean incentive to locate near each other in order to minimize totaltravel costs for consumers. All of theabove One prediction of the model of monopolistic competition isthat barriers toentry will enable firms to have positive profits in the longrun. the number offirms will decline over time as a result of economies ofscale. eventually allfirms in the market will shut down. firms will havean incentive to locate near each other in order to minimize totaltravel costs for consumers. All of theabove

Explanation / Answer

The number of firms will decline over time as a result of economiesof scale when you look this term up it states that over a longperiod of time that an economy can only uphold a certain number ofproducers and in turn will reduce this number over time as someproducers gain economic advantages in pricing

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