Question

If in the short​ run, firms in monopolistic competition​ _________, new firms will enter the market. A. are making an economic profit B. are making zero economic profit C. are incurring an economic loss The​ ______ each individual​ firm's product will​ ______. A. demand​ for; decrease B. demand​ for; increase C. supply​ of; decrease D. supply​ of; increase In the new​ long-run equilibrium, firms​ _______. A. make zero economic profit because over time costs increase B. incur an economic loss because consumers inevitably change their buying habits C. make zero economic profit and entry of new firms ceases D. continue to make an economic profit as long as demand remains stable

Answer 1

Answer: (A) If in the short​ run, firms in monopolistic competition​ "are making an economic profit" , new firms will enter the market.

(B) The "demand for" each individual​ firm's product will​ "decrease."

(C) In the new​ long-run equilibrium, firms "make zero economic profit and entry of new firms ceases."