Figure 11.4Figure 11.4 depicts demand and costs for a monopolistically competitive firm. If the firm's demand curve shifts to the left as more firms enter the market:
A. the firm's average cost will be higher at the new profit maximizing output level.
B. the firm's average cost will be lower at the new profit maximizing output level.
C. the firm's average cost will remain the same at the new profit maximizing output level.
D. There is not sufficient information.
Answer: A
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