A monopolistically competitive firm that is earning profits will, in the long run, experience all of the following except
A)new rivals entering the market.
B)a decrease in demand for its product.
C)demand for the firm's product becomes more elastic.
D)a decrease in the number of rival products.

Question

Quizplus · Accepted Answer

In the long run, new firms enter the market due to the presence of profits, increasing competition and making demand more elastic, but the number of rival products does not decrease.

A Monopolistically Competitive Firm That Is Earning Profits Will, in the Long