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AP® Microeconomics

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Todd's Convenience Store

APMICR-EGQKIZ

Todd operates his convenience store/gas station in a monopolistically competitive industry.

If Todd suddenly sees an increase in the number of his competitors while the degree of product differentiation among the competitors declines, which of the following would be true of Todd’s industry?

A

The industry would be moving toward an oligopoly.

B

The likelihood of Todd’s firm realizing economic profits in the long run would be enhanced.

C

The industry would be moving toward perfect competition.

D

The likelihood of collusive pricing tactics amongst the firms would increase.

E

The industry would be moving toward a monopoly.