In the long run in monopolistic competition, firms earn zero economic profit.

Name: In the long run in monopolistic competition, firms earn zero economic profit.
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Question

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In the long run, firms in monopolistic competition will earn zero economic profit due to the low barriers to entry which allow for more competition and the ability for consumers to substitute similar products. Thus, firms will have to lower their prices to remain competitive, which reduces their profit margins.

In the Long Run in Monopolistic Competition, Firms Earn Zero