A monopolistically competitive firm may have positive or negative profits in the short run but will have zero profits in the long run.False

Name: A monopolistically competitive firm may have positive or negative profits in the short run but will have zero profits in the long run.False
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Question

Quizplus · Accepted Answer

In the long run, new firms enter the market if existing firms are making profits, and exit if they are making losses, leading to zero economic profits due to increased competition and demand elasticity.

A Monopolistically Competitive Firm May Have Positive or Negative Profits