Question

Which of the following conditions ensures that excess profits cannot persist in a perfectly competitive market over the long run?a. Large number of firms in the industryb. Outputs of the firms are perfect substitutes for one anotherc. Complete information is available to all market participantsd. Ease of entry into the market

Answer 1

Ease of entry into the market

Step-by-step explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services.

In the long run, perfect competition make zero economic profit because if firms are making economic profits in the short run , new firms would enter into the industry in the long run. This is made possible because of the ease of entry into the market.

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