In a perfectly competitive market, the process of entry and exit will end when
A)price equals minimum marginal cost.
B)marginal revenue equals marginal cost.
C)economic profits are zero.
D)accounting profits are zero.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, new firms will enter the market if there are economic profits to be made, and existing firms will exit the market if there are economic losses being made. This process will continue until economic profits are driven down to zero, at which point there is no incentive for firms to enter or exit the market. Therefore, the process of entry and exit will end when economic profits are zero.

In a Perfectly Competitive Market, the Process of Entry and Exit