Suppose the dry-cleaning market is monopolistically competitive and economically profitable this year.In the long run, the demand for any one firm's dry-cleaning services will ________ as more firms enter the industry, causing profits to _.

Question

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In a monopolistically competitive market, economic profits attract new firms, increasing competition. This causes the demand for any one firm's services to decrease, leading profits to fall to zero in the long run.

Suppose the Dry-Cleaning Market Is Monopolistically Competitive and Economically Profitable