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Question
In a perfectly competitive market, in the long run, competitive prices equal the minimum possible _________ cost of good.
In a perfectly competitive market, in the long run, competitive prices equal the minimum possible _________ cost of good.
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Solution
The correct option is D average
Perfect
competition is a type of market where there are large number of buyers and
sellers who deals in homogeneous of product due to which no individual unit is
able to influence the price of the product.
Under perfect
competition, there is freedom of entry and exit of firms. Therefore, when there
is super-normal profits or losses the firms in the market enter and exit
respectively due to which the firms in the industry only earn normal profits in
the long run.
Perfect competition is a type of market where there are large number of buyers and sellers who deals in homogeneous of product due to which no individual unit is able to influence the price of the product.
Under perfect competition, there is freedom of entry and exit of firms. Therefore, when there is super-normal profits or losses the firms in the market enter and exit respectively due to which the firms in the industry only earn normal profits in the long run.
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