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In the short run, a monopolistically competitive firm can earn positive, negative, or zero economic profit. In the long run, they will earn zero economic
In the short run, a monopolistically competitive firm can earn positive, negative, or zero economic profit. In the long run, they will earn zero economic profit. This is because free entry and exit in the market lead to firms entering when there is a profit to be made and exiting when there are losses, which drives economic profit to zero.
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