In 1995, Mount Rose is preparing for its annual beauty pageant. Amber Atkins (Kirsten Dunst) is an optimistic teenager who signs up to compete in the pageant so she can follow in the footsteps of her idols, Diane Sawyer, and her mother, a former contestant. Amber and her mother, Annette Atkins (Ellen Barkin), live in a small trailer near their friend Loretta (Allison Janney), in stark contrast to fellow contestant Rebecca Leeman (Denise Richards), the daughter of the richest man in town, and her mother, Gladys Leeman (Kirstie Alley), who is the head of the pageant organizing committee and also a former winner. Various business connections between the Leeman Furniture Store and the judges of the pageant cause many to speculate that the contest will be rigged or fixed.
Many odd events occur around town during the run-up to the pageant, including the death of a contestant, the athletic and competitive Tammy Curry, who is killed when her tractor explodes. Amber decides to pull out of the pageant after her mother is injured in an explosion at their mobile home but reconsiders and decides to compete to follow her dreams and make her mother proud. At the dress rehearsal, fellow contestant Jenelle Betz swaps numbers with Amber. When Jenelle walks on stage at the beginning of rehearsal, a stage light falls and hits her in the head, knocking her unconscious and rendering her deaf. Luckily, Jenelle is a master of sign language so she claims that despite dropping out of the pageant, she has never been happier.
At the pageant, Amber's dance costume mysteriously goes missing. Amber blames Becky and the two get into a catty fight. Amber's best friend and fellow contestant Lisa Swenson (Brittany Murphy) tears them apart. After comforting a crying Amber, Lisa drops out of the pageant in order to give her own costume to her. Amber then performs her tap-dance number to a standing ovation, while Rebecca sings a cringe-worthy rendition of "Can't Take My Eyes Off You" and dances with a life-size Jesus doll on a crucifix, both amusing and horrifying the audience. Amber is named first runner up to Rebecca, however, during the victory parade the next day, Rebecca is riding in an elaborate float made in Mexico and is killed in a freak accident involving gasoline and fire that causes a huge explosion. The grief-stricken Gladys flies into a blind rage and admits to killing Tammy and to being responsible for all the attempts against Amber in the run-up to the pageant, and is immediately arrested. Rebecca's tragic death and Gladys' antics leave Amber as the new pageant winner.
At the State Competition, Amber wins the Minnesota American Teen Princess title by default after all the other contestants fall ill with seafood-related food poisoning, and Amber gets an all-expenses-paid trip to the national Sarah Rose American Teen Princess Pageant. Upon arrival, Amber and the other contestants are devastated to find that the company has been shut down by the IRS for tax evasion, sending all the contestants except for Amber on a rampage, vandalizing and destroying the property.
A few years later, Gladys escapes from prison and is sniping from the top of the Mount Rose supermarket, declaring revenge on Amber. During the six-hour police standoff, a television reporter doing a live report at the scene is hit by a stray bullet. Amber quickly picks up her mic and takes over, impressing the news station with her poise and confidence. The film closes with Amber as co-anchor of the evening news for MinneapolisâSt. Paul television station WAZB-TV, thus living her dream of possibly becoming the next Diane Sawyer.

Question: Why does Lisa drop out of the pageant?
Answer: Lisa drops out in order to give Amber her costume.