(Solved): 7. The diagram shows the marginal cost (MC), average cost (AC), marginal revenue (MR) and average r ...

7. The diagram shows the marginal cost (MC), average cost (AC), marginal revenue (MR) and average revenue (AR) curves of a profit-maximizing, monopolistically competitive firm. Based on its profit, and assuming no market growth, what is likely to happen to the demand for this firm's output in the long run? ( ) A. The short-run profit position will encourage other firms to enter the market and the firm's demand curve will shift to the left. B. The short-run profit position will encourage other firms to enter the market and the firm's demand curve will shift to the right. C. The short-run profit position will encourage other firms to exit the market and the firm's demand curve will shift to the left. D. The short-run profit position will encourage other firms to exit the market and the firm's demand curve will shift to the right.