Firms in a perfectly competitive market usually enter or leave an industry in the short-run and not in the long-run.

Question

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In a perfectly competitive market, firms can enter or exit in both the short-run and the long-run. In the short-run, firms can easily adjust their output level by changing the quantity of the variable input. However, in the long-run, firms can also adjust their fixed inputs, such as plant size and technology, which allows them to enter or exit the market based on their profitability.

Firms in a Perfectly Competitive Market Usually Enter or Leave