Final answer:
A monopolistically competitive firm in long-run equilibrium will earn zero economic profit and face competition from many other firms, although it will not typically produce at minimum average total cost due to excess capacity.
Step-by-step explanation:
Among the options provided, it is true that in the long-run equilibrium of a monopolistically competitive firm, zero economic profit is expected and there are many firms in the market. Unlike perfect competition, a monopolistically competitive firm has some control over its prices because of product differentiation. However, if a firm is earning positive economic profits, this will entice new entrants into the market, which inevitably leads to decreased demand for the individual firm's products and a reduction in economic profits. The long-run equilibrium is reached when the firm's demand curve is tangent to the average cost curve, ensuring that price equals average cost and economic profits are zero - indicating that the firm's resources are earning as much as they would in their next best alternative use. Firms will not typically produce at the minimum average total cost due to the excess capacity characteristic of monopolistically competitive markets.