Assume the market for grocery stores in a town in Long Island is monopolistically competitive. If there are two grocery stores in the town and they are both earning normal profits before a large increase in the town's population, then the most likely outcome after the town's population increases is:

None of the answers are likely to be correct. 

In the short run, the grocery stores will earn excess profits, but the long run new competitors will enter the market and force profits down to the normal level. 

In the short run, the grocery stores will earn modest excess profits, but in the long run the less profitable of the two grocery stores will exit the market, and the surviving store will earn excess profits.

In the short run, the grocery stores will continue to earn normal profits, but the long run they will earn excess profits as they introduce more innovative food choices. 

In the short run, the grocery stores will earn excess profits, but in the excess profits will not last because the town's shoppers will travel to other towns to shop for groceries.