In the long run, a representative firm in a monopolistically competitive industry will end up. Because Earning a normal profit, but not an economic profit.
What Is Normal Profit?
- A profit statistic known as normal profit accounts for both explicit and implicit costs.
- It could be seen in relation to financial gain.
- When the difference between a company's total revenue and its combined explicit and implicit costs is equal to zero, it is said to be operating at normal profit.
What is Economic profit ?
- The difference between the proceeds from the sale of a product and the prices of all inputs used, as well as any opportunity costs, is known as an economic profit or loss.
- Opportunity expenses and explicit costs are subtracted from earned revenues to determine economic profit.
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