A firm will enter a competitive market when

Question

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A firm will enter a competitive market only when it can earn a positive long-run profit, as entering a market with no profit potential would be economically irrational. Gathering market share at the expense of incumbent firms (A) may result in short-term gains, but it will not necessarily lead to long-term profitability. Being the last firm entering (B) does not impact a firm's decision to enter a market if it can still earn a positive long-run profit. Lastly, the long-run supply curve being upward sloping (D) is a characteristic of a market with increasing costs and does not impact a firm's decision to enter a market.

A Firm Will Enter a Competitive Market When