In the long run, in monopolistic competition economic profits most likely will be zero.

Question

Quizplus · Accepted Answer

In the long run in monopolistic competition, new firms will enter the market attracted by the possibility of earning economic profit. This increase in supply will drive down demand and price, reducing economic profit. In the long run, firms will be forced to operate at the minimum point of their average total cost curve, which means that economic profits will be zero.

In the Long Run, in Monopolistic Competition Economic Profits Most