When firms are neither entering nor exiting a perfectly competitive market,
A)total revenue must equal total variable cost for each firm.
B)economic profits must be zero.
C)price must equal average variable cost for each firm.
D)Both a and c are correct.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, when firms are neither entering nor exiting, it indicates that firms are earning zero economic profits. This means that total revenue equals total cost, including both variable and fixed costs, ensuring no incentive for entry or exit.

When Firms Are Neither Entering nor Exiting a Perfectly Competitive