When monopolistically competitive firms earn ________ economic profits, other firms ________ an industry in the long run.

A) positive; enter
B) zero; enter
C) negative; enter
D) zero; exit

Economic Profits

Refers to the financial gains that exceed the total costs, including both explicit and implicit costs, of a business.

Enter Industry

The act of starting or initiating business operations in a particular market sector.

Long Run

The long run is a time period sufficiently long that all factors of production and costs can be fully adjusted, including plant sizes, machinery, and entry or exit from an industry.