The force that leads to zero economic profits for monopolistically competitive firms in the long run is:

Question

Quizplus · Accepted Answer

In the long run, new firms can easily enter the monopolistically competitive market due to low barriers to entry. This increased competition leads to a decrease in market power, forcing firms to lower their prices and reducing their economic profits. Therefore, new entry is the force that leads to zero economic profits for monopolistically competitive firms in the long run.

The Force That Leads to Zero Economic Profits for Monopolistically