If profits in a monopolistically competitive market are positive, we can conclude that

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In a monopolistically competitive market, firms have some degree of market power to set their prices above marginal cost. As a result, if profits are positive, this suggests that the price charged by the firm is greater than their average cost of production. This means that the firm is earning a markup over their costs, which is the source of their profits. It does not necessarily mean that the market is in long-run equilibrium or that price equals average cost.

If Profits in a Monopolistically Competitive Market Are Positive, We