Assume That in a Monopolistically Competitive Industry, Firms Are Earning

Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will

A) reduce the excess capacity in the industry as firms expand production.
B) attract other firms to enter the industry, causing the existing firms' profits to shrink.
C) cause firms to standardize their product to limit the degree of competition.
D) make the industry allocatively efficient as each firm seeks to maintain its profits.

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