In the long run, the profit for a monopolistically competitive firm moves to the competitive level due to:

Question

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In the long run, firms in monopolistically competitive markets face downward sloping demand curves due to product differentiation. As more firms enter the market and offer similar products, the demand for each individual firm's product decreases. This leads to a decrease in the firm's market power and ultimately results in a price closer to the competitive level. Therefore, the profit for a monopolistically competitive firm moves to the competitive level due to moving demand for its product.

In the Long Run, the Profit for a Monopolistically Competitive