Question

A perfectly competitive firm can earn ___________ in the short run.

• A. normal profit
• B. super-normal profit
• C. incur losses
• D. all of the above.

Answer 1

The correct option is D all of the above.

Perfect competition is a type of market where there are huge number of buyers and sellers who deals in the same type of product due to which no individual unit is able to influence the price of the product and the seller have to quote the price that prevails in the market.

Under perfect competition the firms can either earn abnormal profit or loss in the short run.