For a monopolistic competitive firm, which of the following is true in the long run?

Question

Quizplus · Accepted Answer

In the long run, monopolistic competitive firms will earn zero economic profit as there are low barriers to entry and exit, and so new firms will enter the market and increase competition, reducing demand for existing firms' products and driving down price and profit margin. While ATC may be minimized and P=MC may occur in the short run, neither holds true in the long run.

For a Monopolistic Competitive Firm, Which of the Following Is