Refer to the information provided in Figure 15.4 below to answer the question(s) that follow. Figure 15.4
-Refer to Figure 15.4. In the long run in this monopolistically competitive industry,

Question

Refer to the information provided in Figure 15.4 below to answer the question(s) that follow.  Figure 15.4
-Refer to Figure 15.4. In the long run in this monopolistically competitive industry,

Quizplus · Accepted Answer

In the long run, firms in a monopolistically competitive industry will experience entry and exit until they earn only a normal profit. This is because if firms are making economic profits, new firms will enter the market, increasing competition and driving down prices and profits. Conversely, if firms are incurring losses, some will exit the market, reducing competition and allowing the remaining firms to increase prices and return to normal profit levels. Options B, C, and D do not accurately describe the long-run equilibrium in a monopolistically competitive market.

Refer to the Information Provided in Figure 15