why-do-firms-in-monopolistic-competition-earn-zero-economic-profit-in-the-long-r

Question

Why do firms in monopolistic competition earn zero economic profit in the long run?

Accepted Answer

Price equals average total cost due to entry of new firms.

Answer

Price is greater than average total cost due to product differentiation.

Answer

Price is less than average total cost due to high barriers to entry.

Answer

Price equals marginal cost due to perfect competition.