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Diane operates her landscaping company in a monopolistic competition structure. This past year, Diane earned a large profit as well as the other firms that service the same marketplace.

In the long-run you would expect


Diane to continue to make an economic profit.


firms to collude to gain the largest profit possible for all firms.


other firms to enter causing Diane to earn a normal profit.


other firms to exit causing Diane's profits to increase.


other firms to enter causing Diane to incur losses.

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