We assume that in the long run in a perfectly competitive market:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms can enter or exit the market in the long run based on profit opportunities. This leads to constant pressure on prices and ensures that the market remains competitive. Therefore, choice A is the correct answer. Choice B is incorrect because the number of firms is not fixed, and firms can enter or exit the market. Choice C is incorrect because prices can fluctuate in the short term, but in the long run, they tend to settle at a level just enough to cover the cost of production. Choice D is incorrect because collusion is unlikely to happen due to the presence of a large number of firms and the absence of market power.

We Assume That in the Long Run in a Perfectly