In which of the following ways is a monopolistically competitive firm like a perfectly competitive firm?

Question

Quizplus · Accepted Answer

Like perfectly competitive firms, monopolistically competitive firms will enter or exit the market depending on the level of profits in the long run. If the firm is making positive economic profits, new firms will enter the market, leading to increased competition and decreased demand for the original firm's product. This will eventually drive down the original firm's profits to zero in the long run, just like in a perfectly competitive market. Therefore, the long-run economic profits for a monopolistically competitive firm will be equal to zero.

In Which of the Following Ways Is a Monopolistically Competitive