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General Snacks is a typical firm in a market characterized by the model of monopolistic competition. Initially, the market is initially in the long-run equilibrium, and then there is an increase in demand for snacks. We expect thatA. In the long run, new firms will enter the market.B. Firms will leave the market in the long runC. There will be a short-run increase in the number of firms, but in the long run, the number of firms will return to original levelD. Firms will shut down, but they will not leave the industry in the long run.
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