In a market that is characterized by free entry and exit, profit serves the function of:
A) drawing new firms into the industry when profit is greater than normal.
B) drawing new firms into the industry when profit is lower than normal.
C) causing some firms to leave when profit is greater than normal.
D) causing some firms to enter when profit is lower than normal.
E) compensating owners with a higher than normal rate of return on investment.
Correct Answer:
Verified
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