Free Exit Implies That

question 48

Multiple Choice

Free exit implies that

• A) a perfectly competitive firm can never earn a profit.
• B) if an industry's existing firms make excessively high losses, firms are likely to exit the industry.
• C) the government regulates the number of firms it allows in an industry.
• D) firms will always earn below normal profit, as firms can exit the industry at any time they like.

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