Above-Normal Profits Earned by Existing Firms in a Perfectly Competitive

question 28

Multiple Choice

Above-normal profits earned by existing firms in a perfectly competitive market will eventually lead to:

• A)exit of the firms from the market.
• B)an increase in the market price of the good.
• C)entry of new firms into the market.
• D)a decrease in the aggregate supply.
• E)existing firms emerging as price makers.

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