Assume that all firms in a particular perfectly competitive industry are earning economic profits.This will cause firms to ______ the industry,which will continue until ______.
A) exit;economic losses occur
B) enter;economic profits are zero
C) enter;accounting profits are zero
D) exit;economic profits are zero
E) enter;economic profits are negative

Question

Quizplus · Accepted Answer

In a perfectly competitive market, economic profits attract new firms to enter the industry, increasing supply and driving down prices until economic profits are zero, meaning firms earn normal profits.

Assume That All Firms in a Particular Perfectly Competitive Industry