If the firms in a monopolistically competitive industry are earning short-run profit, which of the following is not likely to occur in the long run?
A) New firms will enter the industry.
B) New firms in the industry will draw customers away from existing firms.
C) Existing firms in the industry will face a decrease in demand.
D) Firms will continue to earn profit.
E) Firms will produce with some excess capacity.
Correct Answer:
Verified
Q69: Because of easy entry, monopolistically competitive firms
Q70: Exhibit 10-11 Q71: In the long run, the economic profit Q72: If a monopolistically competitive firm is in Q73: A firm will only earn normal profit Q75: In the long run in monopolistic competition, Q76: A profit-maximizing firm in monopolistic competition should Q77: Monopolistic competition is similar to Q78: Which of the following describes the relationship Q79: In the long run in monopolistic competition,
A)perfect competition because
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