Which of the following is true of a perfectly competitive market?
A) If economic profits are earned then the price will fall over time.
B) In long-run equilibrium P = MR = SRMC = SRATC = LRAC.
C) A constant-cost industry exists when the entry of new firms has no effect on their cost curves.
D) All of these.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, all the statements are true: economic profits attract new firms causing prices to fall, long-run equilibrium involves equality of price, marginal revenue, short-run marginal cost, short-run average total cost, and long-run average cost, and a constant-cost industry means new firms do not affect cost curves.

Which of the Following Is True of a Perfectly Competitive