The primary force encouraging the entry of new firms into a purely competitive industry is
A)normal profits earned by firms already in the industry.
B)economic profits earned by firms already in the industry.
C)government subsidies for start-up firms.
D)a desire to provide goods for the betterment of society.

Question

Quizplus · Accepted Answer

Economic profits earned by firms already in the industry signal new entrants that there are opportunities for profit. This acts as an incentive for new firms to enter the market, hoping to capture some of those profits for themselves.

The Primary Force Encouraging the Entry of New Firms into a Purely