When a perfectly competitive firm experiences zero economic profits
A) the high barriers to entry prevent further competition.
B) existing firms exit the industry.
C) additional firms enter the industry.
D) firms have no incentive to exit or enter the industry.
D
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If the Federal Reserve raises interest rates in an autonomous tightening ________
A) the MP curve shifts up, there is an upward movement along the IS curve, and the AD curve shifts to the left to a lower level of equilibrium output B) the MP curve shifts down, there is a downward movement along the IS curve and the AD curve shifts to the right to a higher level of equilibrium output C) the MP curve shifts up, there is a downward movement along the IS curve and the AD curve shifts to the right to a lower level of equilibrium output D) the MP curve shifts down, there is an upward movement along the IS curve and the AD curve shifts to the left to a higher level of equilibrium output E) none of the above
Perfect competition is an ideal market structure
a. True b. False Indicate whether the statement is true or false