Refer to Figure 15.5. In the long run in this monopolistically competitive industry,

A) firms will leave the industry until each firm earns an economic profit.
B) some firms will leave the industry until the remaining firms earn a normal profit.
C) firms will enter the industry, which will increase the demand for the product.
D) the government will subsidize the firms to eliminate any losses the firms incur.

Monopolistically Competitive

A market structure characterized by many sellers offering differentiated products, leading to some degree of market power and price setting.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, thereby factoring in opportunity costs.

Normal Profit

The level of profit that is necessary for a company to remain competitive in the market, often considered as the minimum return required to cover opportunity costs.