Competition ensures that if excessive profits are made,others will be attracted to the industry.

Name: Competition ensures that if excessive profits are made,others will be attracted to the industry.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. In a competitive market, if one firm earns excessive profits, other firms will enter the market to try and capture some of those profits, increasing competition and driving down prices. This helps to ensure that excessive profits are not sustained in the long run.

Competition Ensures That If Excessive Profits Are Made,others Will Be