In long-run equilibrium in a monopolistically competitive market, firms typically:

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In the long-run, firms in monopolistically competitive markets will enter or exit the market until economic profits are driven to zero, resulting in firms earning a normal profit. This occurs because there are low barriers to entry and exit in these markets, which allows for easy entry of new firms and exit of existing firms. Therefore, firms do not have the ability to earn an above-normal profit or suffer losses in the long-run equilibrium. Firms also do not charge a price equal to marginal cost or marginal revenue, as they have some market power to set prices above marginal cost, but face competition from other firms that limits their ability to charge higher prices.

In Long-Run Equilibrium in a Monopolistically Competitive Market, Firms Typically