To maintain their economic profits, firms in monopolistic competition must continually engage in

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Firms in monopolistic competition must engage in product development and marketing to differentiate their product and maintain their market power. This allows them to charge higher prices and earn economic profits in the short run. However, over time, other firms may enter the market with similar products, reducing the demand for the original firm's product, and causing the firm to lose its market power. To maintain economic profits, the firm must continue to innovate and differentiate its product.

To Maintain Their Economic Profits, Firms in Monopolistic Competition Must