Which of the following will happen if some firms in a monopolistically competitive market incur losses in the short run and the market conditions are not expected to change?

Question

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In a monopolistically competitive market, if some firms incur losses in the short run and the market conditions are not expected to change, they will exit the industry in the long run. This is because monopolistically competitive firms have the freedom to exit and enter the market, and if they cannot make a profit, they will leave. This will shift the demand curve for the remaining firms to the right, allowing them to increase their prices and profits in the long run. Thus, only the profitable firms will continue production in the long run, and some firms will exit the industry.

Which of the Following Will Happen If Some Firms in a Monopolistically