A purely competitive firm is precluded from making economic profits in the long run because
A)it is a "price taker."
B)its demand curve is perfectly elastic.
C)of unimpeded entry to the industry.
D)it produces a differentiated product.

Question

Quizplus · Accepted Answer

In a purely competitive market, the absence of barriers to entry allows new firms to enter the market if existing firms are making economic profits, driving prices down and eliminating those profits in the long run.

A Purely Competitive Firm Is Precluded from Making Economic Profits