If all firms in a perfectly competitive industry are earning a normal profit, then:
A)new firms will enter the industry.
B)existing firms will exit the industry.
C)there is no incentive for firms to enter or exit the industry.
D)the market supply curve will shift to the left.

Question

Quizplus · Accepted Answer

If a firm is earning a normal profit, then its accounting profit is equal to the opportunity cost of the resources provided by the firm's owners, so there is no incentive for entry or exit.

If All Firms in a Perfectly Competitive Industry Are Earning