Which of the following is consistent with a competitive industry?
A) Marginal cost pricing.
B) High barriers to entry.
C) Economic profit in the long run.
D) Production and supplies are constrained.

Question

Quizplus · Accepted Answer

In a competitive industry, firms are price takers and typically set prices equal to marginal costs to maximize profits, which is consistent with marginal cost pricing. High barriers to entry, economic profits in the long run, and constrained production and supplies are more characteristic of non-competitive or monopolistic markets.

Which of the Following Is Consistent with a Competitive Industry