The monopoly characteristic of monopolistically competitive firms ensures that such firms will earn positive economic profits over the long run.

Question

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Monopolistically competitive firms do not have complete market power, and there are alternatives available to consumers. Therefore, in the long run, new firms are likely to enter the market, which will increase competition and drive down economic profits. While monopolistically competitive firms may earn positive economic profits in the short run, they will not do so over the long run.

The Monopoly Characteristic of Monopolistically Competitive Firms Ensures That Such