In the Theory of Perfect Competition, the Assumption of Easy

question 6

Multiple Choice

In the theory of perfect competition, the assumption of easy entry into and exit from the market implies

• A)positive economic profits in the long run.
• B)losses in the long-run equilibrium.
• C)zero economic profits in the long run.
• D)zero economic profits in both the short run and the long run.
• E)positive economic profits in both the short run and the long run.

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Definitions:

Investigative Expertise

Specialized skill or knowledge in conducting detailed and systematic examinations or inquiries.

Sound

A logical argument that is both valid and based on accurate premises.

Valid

Pertaining to an argument or claim that is logically sound and holds under scrutiny.

Unsound

Refers to an argument that either has false premises or does not follow a logical structure, leading to an unreliable conclusion.