In Perfectly Competitive Markets, an Implication of Entry and Exit

question 128

Multiple Choice

In perfectly competitive markets, an implication of entry and exit in response to economic profit and loss is that:

• A)firms must earn positive economic profit in the long run.
• B)firms will produce the quantity that minimizes average variable costs in the short run.
• C)firms will produce the quantity that minimizes average total costs in the long run.
• D)market demand is completely elastic.