In the long run, the economic profits of Hoot's Chicken 'n' Ribs, a monopolistic competitor, are:

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Quizplus · Accepted Answer

In the long run, economic profits of a monopolistic competitor are eliminated due to new firms entering the industry, increasing competition and reducing demand for the existing firm's products. Therefore, choice C is correct. Choice A is incorrect because while competition may not be perfect, new firms entering the industry will still have an impact on the monopolistic competitor's profits. Choice B is incorrect because a downward-sloping demand curve does not prevent new firms from entering the industry and reducing the monopolistic competitor's profits. Choice D is incorrect because firms leaving the industry would decrease competition and potentially increase the monopolistic competitor's profits. Choice E is incorrect because firms can enter the industry, even if there are barriers to entry.

In the Long Run, the Economic Profits of Hoot's Chicken