Which of the following is true regarding the long run for a firm in monopolistic competition?

Question

Quizplus · Accepted Answer

In the long run, firms in monopolistic competition will make zero economic profit due to the entry and exit of firms in the market. This happens because if firms are making profits, new firms will enter the market, increasing competition and driving down prices and profits. Conversely, if firms are making losses, some will exit the market, reducing competition and allowing the remaining firms to increase prices and profits until they break even.

Which of the Following Is True Regarding the Long Run