Multiple Choice
If firms in a perfectly competitive industry are making zero economic profit, then
A) some of those firms will leave the industry, because firms cannot persistently go without making economic profit.
B) new firms will enter the industry, because the new entrants would be ensured of doing as well as in their best foregone alternative.
C) there is no incentive for either entry or exit.
D) some of the firms will temporarily shut down.
Correct Answer:
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