In the long run, in a perfectly competitive industry:
A)economic profit tends to persist.
B)the number of firms in the industry will increase.
C)economic loss tends to persist.
D)economic profit and loss are driven to zero by entry and exit.

Question

Quizplus · Accepted Answer

Economic profit leads to entry by new firms, and economic loss leads to exit by existing firms. In the long run, this entry and exit drive both economic profit and economic loss to zero.

In the Long Run, in a Perfectly Competitive Industry