If monopolistically competitive firms are earning positive economic profits in the short run,then in the long run:

Question

Quizplus · Accepted Answer

In the long run, firms will enter the industry due to the positive economic profits being earned, leading to an increase in supply and a decrease in demand for each individual firm. As a result, the demand curve will shift downward, and economic profits will be reduced to zero. Therefore, option D is the correct choice.

If Monopolistically Competitive Firms Are Earning Positive Economic Profits in the Short