If a firm in a perfectly competitive industry is experiencing higher than normal returns,in the long-run
A)Some firms will leave the industry and price will rise
B)Some firms will enter the industry and price will rise
C)Some firms will leave the industry and price will fall
D)Some firms will enter the industry and price will fall

Question

​If a firm in a perfectly competitive industry is experiencing higher than normal returns,in the long-run
A)​Some firms will leave the industry and price will rise
B)Some firms will enter the industry and price will rise
C)Some firms will leave the industry and price will fall
D)​Some firms will enter the industry and price will fall

Quizplus · Accepted Answer

In a perfectly competitive market, higher than normal returns attract new firms to enter the industry, increasing supply and leading to a decrease in price until normal returns are restored.

​If a Firm in a Perfectly Competitive Industry Is Experiencing

If a Firm in a Perfectly Competitive Industry Is Experiencing