Firms have incentive to enter a monopolistically competitive market if:
A. positive profits are being earned and the price is below MC.
B. positive profits are being earned and they can create a similar product.
C. zero profits are being made and they can duplicate the product exactly.
D. zero profits are being made and they can create a similar product.
Answer: B
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a. supply shock b. shortage c. excess supply d. disequilibrium e. search costs