If firms in a monopolistically competitive industry are making economic profits:

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In a monopolistically competitive industry, economic profits attract new firms to enter the market. As more firms enter, the market becomes more competitive, reducing the profits of existing firms. This competitive pressure can eventually lead some firms to exit the market. Therefore, the entry of new firms is the most likely outcome if firms are making economic profits. Barriers to entry are unlikely to strengthen in the short run, as new firms can enter the market in the absence of significant barriers. Regulation is also unlikely, as monopolistic competition typically does not lead to serious consumer harm or market failure.

If Firms in a Monopolistically Competitive Industry Are Making Economic