Because competitive firms What is true about firms in monopolistic competition in the short-run? Multiple choice question. Monopolistically competitive firms generate economic losses. Monopolistically competitive firms generate an economic profit. Monopolistically competitive firms can generate an economic profit, a normal profit, or an economic loss. Monopolistically competitive firms generate a normal profi some control over prices, the firm will charge consumers the price they are willing and able to pay for the available output, which is found by projecting the profit-maximizing output level onto the curve