In the long run, one of the characteristics of monopolistic competitive firms is that they
- make abnormal profits
-
suffer losses
- make normal profits
- collude with each other
The correct answer is: B
Explanation
In the long run, monopolistic firms can freely enter and exits the market, firms can make decisions independently; there is some degree of market power; and buyers and sellers have imperfect information.
The firms produce at a level where marginal cost and marginal revenue are equal. Companies in monopolistic competition will earn zero economic profit in the long run.