A. Earn only a normal profit because entry into the industry is not blocked
Monopolistic competitive firms operate in a market structure where there are many firms producing slightly differentiated products. Since entry into the industry is not blocked, firms cannot earn super normal profits in the long run as new firms will enter the market and compete away any excess profits. This leads to firms earning only a normal profit in the long run.
In a long run, Monopolistic competitive firm will most probably;
A. Earn only a normal profit because entry into the industry is not blocked
B. Incur a lost because the cost of product differentiation are so high
C. Earn a zero normal profit because of government regulations.
D. Earn a super normal profit because each firm has a monopoly over its product.
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