Assume a firm in a competitive industry iAs new firms enter a monopolistically competitive market, profits of existing firms a. rise, and product diversity in the market decreases. b. decline, and product diversity in the market increases. c. decline, and product diversity in the market decreases. d. rise, and product diversity in the market increases.s producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is a. -$1,600. b. $3,200. c. $1,600. d. $8,000