In a monopolistically competitive market, a firm can sustain economic profits in the long run due to product differentiation and barriers to entry.

In a monopolistically competitive market, firms sell products that are similar but not identical, allowing them to have some control over their prices. This product differentiation means that consumers may prefer one firm's product over another, giving that firm the power to set higher prices and earn economic profits. Although there are few barriers to entry in this market, the unique features of each product create a situation where new firms may enter, but they cannot easily replicate the existing firm's brand or quality. For example, if a local coffee shop offers a special blend that customers love, it may continue to earn profits as long as people prefer its unique coffee over others. Thus, while competition exists, the distinctiveness of products enables firms to maintain profits longer than they might in a perfectly competitive market.