Free Entry Implies That

question 7

Multiple Choice

Free entry implies that

• A) a perfectly competitive firm can never earn a profit.
• B) if firms in an industry are making excessively high profits, new firms are likely to enter the industry.
• C) the government regulates the number of firms that are allowed in an industry.
• D) firms will always earn a profit, as new firms can enter the industry at any time they like.

---

Definitions:

Redundant Controls

Systems or mechanisms put in place to act as backup or fail-safes in order to ensure continuous operation and enhance safety.