In monopolistic competition there are ________ barriers to entry, so therefore in the long run, economic profit ________.
A) no; equals zero
B) many; is substantial
C) many; equals zero
D) no; is substantial
E) many; might be earned depending on the degree of product differentiation

Question

Quizplus · Accepted Answer

In monopolistic competition, there are low or no barriers to entry, which allows new firms to enter the market easily. This increases competition and drives economic profit towards zero in the long run as firms cannot sustain supernormal profits with new entrants continuously entering the market.

In Monopolistic Competition There Are ________ Barriers to Entry, So