Question

Under competitive conditions the industry will be in equilibrium ___________.

• A. when each firm is in equilibrium equating MC with MR
• B. when all the firms are earning only normal profits
• C. when firms outside have no tendency to enter the industry and those within, have no tendency to leave the industry
• D. when all the conditions mentioned above are fulfilled

Answer 1

The correct option is D when all the conditions mentioned above are fulfilled

Under competitive conditions the industry will be in equilibrium when all the conditions mentioned are fulfilled:a) when each firm is in equilibrium equating MC with MRb) when all the firms are earning only normal profits

c) when firms outside have no tendency to enter the industry and those within, have no tendency to leave the industry