Q: What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
a.
The firm will go out of business.
b.
Consumers will substitute a rival’s
product.
c.
Consumers will boycott the product.
d.
The government will regulate the price.
A: Consumers may boycott the product, but more likely the answer would be D. The government will regulate the price.
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