Because of the ease of entry of new firms into monopolistically competitive markets in the long run,existing firms in these markets _____

Question

Quizplus · Accepted Answer

In the long run, existing firms in monopolistically competitive markets will earn no economic profit. This is because new firms will enter the market, increasing competition and reducing each firm's market power. As a result, firms will need to lower their prices or improve the quality of their products to maintain market share, leading to lower profits in the long run.

Because of the Ease of Entry of New Firms into Monopolistically