Which of the following is characteristic of a perfectly competitive market?
A)A small number of firms.
B)Exit of small firms when profits are high for large firms.
C)Zero economic profit in the long run.
D)Marginal revenue lower than price for each firm.

Question

Quizplus · Accepted Answer

A perfectly competitive market is characterized by a large number of small firms that have no market power. They are price takers and cannot influence the market price. In the long run, these firms earn zero economic profit because there are no barriers to entry, and new firms can enter easily, driving down profits for existing firms. Therefore, option C, zero economic profit in the long run, is characteristic of a perfectly competitive market.

Which of the Following Is Characteristic of a Perfectly Competitive