Any time firms in monopolistic competition are earning above-normal profit,

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In monopolistic competition, firms have some market power to set prices, but they face competition from other firms producing similar products. When firms in monopolistic competition are earning above-normal profit, new firms have an incentive to enter the market to capture some of those profits. As new firms enter, the market becomes more crowded, and competition increases, causing prices to fall and reducing profits for all firms. This continues until firms are earning only normal profit, which is the minimum profit necessary to keep firms producing in the long run. Therefore, the entry of new firms into the market is a corrective mechanism that helps to eliminate economic profits.

Any Time Firms in Monopolistic Competition Are Earning Above-Normal Profit