Asked by Parker Elliott on May 23, 2024
Verified
The primary force encouraging the entry of new firms into a purely competitive industry is
A) normal profits earned by firms already in the industry.
B) economic profits earned by firms already in the industry.
C) government subsidies for start-up firms.
D) a desire to provide goods for the betterment of society.
Purely Competitive
A market structure characterized by many participants offering identical products, where no single buyer or seller can influence the market price.
Economic Profits
The excess of total revenue over total costs, including both explicit and implicit costs, as calculated in economic theory.
Normal Profits
The minimum level of profit necessary for a company to remain competitive in the market, essentially covering opportunity costs but not generating excess profit.
- Identify the primary forces encouraging the entry of new firms into purely competitive industries.
Verified Answer
Learning Objectives
- Identify the primary forces encouraging the entry of new firms into purely competitive industries.
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