In a monopolistically competitive market, what occurs at the equilibrium point when firms are earning economic profits?

In a monopolistically competitive market, when firms are earning economic profits, it means they are making more money than what it costs to produce their goods. At this equilibrium point, the demand for their products is higher than the average total cost, which leads to these profits. However, this situation attracts new firms to enter the market because they see an opportunity to earn profits too. As new firms enter, they decrease the demand for the existing firms' products because customers now have more choices. Over time, this will lead to a decrease in economic profits for all firms until they reach a new equilibrium where firms earn just enough to cover their costs, resulting in zero economic profit.