In the long run,a representative firm in a monopolistically competitive industry will typically:
A) have an elasticity of demand that will be less than it was in the short run.
B) have a larger number of competitors than it will in the short run.
C) produce a level of output at which marginal cost and price are equal.
D) earn a normal profit,but not an economic profit.

Question

Quizplus · Accepted Answer

In the long run, firms in a monopolistically competitive market earn normal profits due to the entry of new firms attracted by short-run economic profits, which increases competition and drives profits down to a normal level.

In the Long Run,a Representative Firm in a Monopolistically Competitive