In the long run, the economic profit of Hoot's Pump Chicken 'n' Ribs, a monopolistic competitor,

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Quizplus · Accepted Answer

In the long run, economic profit in a monopolistically competitive market is eliminated because new firms will enter the industry due to the existence of profit. As more firms enter, the demand for each individual firm's product decreases, reducing market power and profits. Therefore, option C is the correct choice. Options A and B are incorrect because imperfect competition and downward-sloping demand curves do not prevent the eventual elimination of economic profit. Option D may occur but is not a necessary condition for the elimination of economic profit. Option E is incorrect because new firms do have the ability to enter the industry.

In the Long Run, the Economic Profit of Hoot's Pump