Under which market structure are profit rewards most likely to be quickly taken away by existing firms or new firms entering the industry?
A)oligopoly
B)pure monopoly
C)pure competition
D)monopolistic competition

Question

Quizplus · Accepted Answer

In a pure competition market structure, there are many firms selling identical products, which makes it easy for new firms to enter the market. This high level of competition means that any firm earning supernormal profits will attract new entrants, quickly eroding those profits as the newcomers increase supply and drive prices down.

Under Which Market Structure Are Profit Rewards Most Likely to Be