When a Perfectly Competitive Firm Experiences Zero Economic Profits

question 373

Multiple Choice

When a perfectly competitive firm experiences zero economic profits

• A) the high barriers to entry prevent further competition.
• B) existing firms exit the industry.
• C) additional firms enter the industry.
• D) firms have no incentive to exit or enter the industry.

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Definitions:

Product Innovation

The introduction of new or significantly improved goods or services in terms of their capabilities, components, or uses.

Chemical Engineer

A professional who applies the principles of chemistry, biology, physics, and math to solve problems involving the production or use of chemicals, fuel, drugs, food, and many other products.

Business Ownership

The legal possession and responsibility for a business entity, including sole proprietorships, partnerships, corporations, and limited liability companies.

Industry Weakness

Aspects or characteristics of an industry that represent disadvantages or vulnerabilities, potentially hindering its performance or growth.