Which of the following is true for a perfectly competitive ﬁrm in the long run?
A) There are barriers to entry and exit in the long run.
B) In the long run, price is greater than marginal revenue.
C) Firms make normal proﬁts in the long run.
D) The long-run supply curve is horizontal.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms can enter and exit the market freely in the long run, leading to only normal profits being made. This is because any economic profits attract new firms, increasing supply and driving prices down until only normal profits are earned.

Which of the Following Is True for a Perfectly Competitive