Answer:
In the short run monopolistically competitive industries___________ while in the long run they__________a. May earn economic profit may lose economic profit due to new entry b. May lose economic profit due to new entry; may earn economic profit rarely earn a profit. c. May gain profit due to exiting firms
a. May earn economic profit may lose economic profit due to new entry
Step-by-step explanation:
A monopolistically competitive industry is characterized by an industry with many firms whose goods and services are not perfect substitutes and are further differentiated through branding, thereby limiting competition. There is easy entry and exit in a monopolistically competitive market or industry though the prevailing competitiveness is imperfect.