Profit maximizing firms in competitive industries with free entry and exit face a price equal to the lowest possible
A)marginal cost of production.
B)fixed cost of production.
C)total cost of production.
D)average total cost of production.

Question

Quizplus · Accepted Answer

In a competitive market with free entry and exit, firms will enter or exit until economic profits are zero, which occurs when price equals the minimum average total cost.

Profit Maximizing Firms in Competitive Industries with Free Entry and Exit