Which of the following is true for a perfectly competitive agricultural market with economic profits?
A)Firms will enter and existing firms will increase their production until economic profits are zero.
B)The profits will last indefinitely since there are barriers to entry.
C)Firms will exit until normal profits are zero.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, economic profits attract new firms, increasing supply and driving prices down until profits are zero, achieving long-run equilibrium.

Which of the Following Is True for a Perfectly Competitive