In a monopolistically competitive industry, the firms are currently making an economic profit. When this market moves to its long-run equilibrium, the firms' demand curves will have ________ and their economic profit will have ________. Group of answer choices shifted rightward; decreased to zero remained the same; decreased to zero shifted leftward; decreased but remain greater than zero shifted leftward; decreased to zero
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This means that they can charge a price above their marginal cost and earn a profit. However, in the long run, new firms can enter the market and offer similar products, reducing the market power of existing firms. This will cause the demand curve for each firm Show more…
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