If there are economic profits in a monopolistically competitive industry,they will generally be competed away through the

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In monopolistically competitive markets, firms are able to differentiate their products to some extent, creating some market power. This may lead to economic profits in the short run, but in the long run, potential entrants will see the profit opportunity and enter the market, increasing competition and driving down prices. Therefore, economic profits will be competed away through the entry of new firms. Choices A, C, and D do not necessarily lead to increased competition and do not explain how economic profits would be competed away. Choice E may occur, but it would not be the most likely outcome.

If There Are Economic Profits in a Monopolistically Competitive Industry,they