In a purely competitive industry,
A) there will be no economic profits in either the short run or the long run.
B) economic profits may persist in the long run if consumer demand is strong and stable.
C) there may be economic profits in the short run but not in the long run.
D) there may be economic profits in the long run but not in the short run.

Question

Quizplus · Accepted Answer

In a purely competitive industry, firms can earn economic profits in the short run due to market conditions, but in the long run, entry of new firms eliminates these profits, leading to zero economic profit.

In a Purely Competitive Industry