Question

In the long run, monopolistically competitive firms tend to have:

high economic profits.

substantial economic losses.

zero economic profits.

negative economic profits.

Answer 1

If the market firm is perfect competitive then in long term,the economic profit is normal and in case of monopolistic competition ,the long-term economic profit is always zero because as we all know that in monopolistic market there are few barriers to entry

So in the long run ,as there are more firms which will enter into the market causes more supply of the product and price will decrease

And ultimately economic profit will reduce to zero

Hence ,Option C is true.