Question

If profits are negative in a monopolistically competitive market, then: the industry will stop production. new firms will enter the market until economic profits are zero. firms will exit the market until economic profit returns to the optimal positive level. firms will exit the market until economic profit returns to zero

Answer 1

Profits are negative in a monopolistically competitive market, the new firms will enter the market until economic profits are zero.

What is competitive market?

Competitive market is a market that involves many sellers and producer that are competing with one another.

They compete to provide goods and services

Therefore, profits are negative in a monopolistically competitive market new firms will enter the market until economic profits are zero.

Learn more on competitive market here,

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