As long as firms currently in a monopolistically competitive mar O there must be large barriers to entry. O the government will step in to regulate prices to ensure they stay comm O more firms will leave the market before the profits are competed awa O more firms will enter the market with products that are close substitu
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This differentiation can create barriers to entry for new firms because they would need to invest in creating a unique product or brand to compete effectively. Show more…
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If firms in a competitive industry are earning positive economic profits, in the long run we expect the supply curve for the product will shift to the right as new firms enter the industry, causing industry output to increase and price to fall.
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