In the theory of perfect competition, the assumption of easy entry into and exit from the market implies

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The assumption of easy entry into and exit from the market in perfect competition implies that in the long run, firms will enter the market if there are profits to be made and exit if they are incurring losses. This process continues until firms earn zero economic profits, meaning they cover all their costs, including a normal return on investment.

In the Theory of Perfect Competition, the Assumption of Easy