Describe the transition from short-run to long-run equilibrium in a monopolistically competitive industry

What will be an ideal response?

In the short run, firms in a monopolistically competitive industry may make a positive profit. However, since there are assumed to be no significant barriers to entry, positive profits attract entry. As more firms (or varieties) enter, the demand for each firm (or variety) decreases, and thus prices and profits fall until there is no further incentive for entry.