Which of the following is consistent with farming as a competitive market?
A)A large percentage of costs are for advertising.
B)Negative economic profit in the long run.
C)Positive economic profit in the long run.
D)Zero economic profit in the long run.

Question

Quizplus · Accepted Answer

Farming as a competitive market is likely to result in zero economic profit in the long run. In a competitive market, firms are forced to sell their products at the prevailing market price, which means that they cannot charge a higher price to increase their profits. As such, in the long run, firms will only earn normal profit, which is also known as zero economic profit. This means that although firms will earn enough to stay in business, they will not be able to earn excess profits.

Which of the Following Is Consistent with Farming as a Competitive