Which of the following statements best describes the long run adjustment in a
One or more competitors closes, increasing the demand for the output of an existing seller in the monopolistic competition. The existing seller’s profits increase and positive profit is sustained in the long run.
One or more competitors opens, reducing the demand for the output of an existing seller in the monopolistic competition. The existing seller’s profits decline and the seller incurs losses and exits the industry in the long run.
One or more competitors closes, increasing the demand for the output of an existing seller in the monopolistic competition. The existing seller’s profits increase until there is zero profit in the long run.
One or more competitors opens, reducing the demand for the output of an existing seller in the monopolistic competition. The existing seller’s profits decline and the seller earns zero profit in the long run.
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