Which of the following best explains why price in competitive price-taker markets will tend to be driven to the minimum average total cost?
A) homogeneous products.
B) few sellers.
C) firms face downward-sloping demand curves.
D) free entry and exit.

Question

Quizplus · Accepted Answer

Free entry and exit in competitive markets allow firms to enter when there are profits and exit when there are losses, driving prices to the minimum average total cost in the long run.

Which of the Following Best Explains Why Price in Competitive