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If Firms in a Monopolistically Competitive Industry Are Earning Economic

Question 161

Multiple Choice

If firms in a monopolistically competitive industry are earning economic profits, then in the long run


A) these firms can continue earning economic profits because entry into the industry is blocked.
B) new firms producing close substitutes will enter the industry and this entry will continue until economic profits are eliminated.
C) new firms producing the exact same product will enter the industry and this entry will continue until economic profits are eliminated.
D) the government will most likely regulate firms in this industry to reduce these economic profits.

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