If a monopolistically competitive firm is earning economic profits in the short-

Question

If a monopolistically competitive firm is earning economic profits in the short-run, then: (Points : 2)       these profits will persist in the long-run because of the firm's limited monopoly power.
      these profits will be eliminated in the long-run as new firms enter the industry.
      its output will increase in the long-run.
      its price will increase in the long run as consumers become more dependent on the product. If a monopolistically competitive firm is earning economic profits in the short-run, then: (Points : 2)

Explanation / Answer

these profits will be eliminated in the long-run as new firms enter the industry.

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