In monopolistic competition in the long run,firms ________.

Question

Quizplus · Accepted Answer

In the long run, firms in monopolistic competition will make zero economic profit due to the entry of new firms in the market. However, they will still have excess capacity due to the fact that each firm produces a slightly differentiated product, which reduces their ability to fully utilize their production capacity. Therefore, the correct answer is D) make zero economic profit and have excess capacity.

In Monopolistic Competition in the Long Run,firms ________