In a competitive industry where the typical firm is making economic profit,
A)entry occurs as long as economic profit can be made.
B)entry occurs until supply equals demand.
C)entry occurs until price equals minimum average variable cost.
D)entry occurs until price equals marginal cost.
E)exit occurs as firms are sold to the highest bidders.

Question

Quizplus · Accepted Answer

In a competitive industry where the typical firm is making economic profit, entry occurs as long as economic profit can be made. This is because new firms will see the opportunity to make profits and enter the market, which increases competition and reduces profits until they reach zero in the long run equilibrium.

In a Competitive Industry Where the Typical Firm Is Making