If firms in monopolistic competition are earning economic profits,then

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Economic profits in monopolistic competition attract new firms into the industry, which increases the number of available sellers, reduces demand for each seller's product, and eventually erodes the profits. In the long run, the industry will reach a point where firms are earning only normal profits. Therefore, if firms in monopolistic competition are earning economic profits, new rivals enter the industry, and the demand for any seller's good decreases.

If Firms in Monopolistic Competition Are Earning Economic Profits,then