Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish in the long run? Group of answer choices The demand for products falls over time, so firms are unable to generate revenue. Firms that experience losses try to increase supply to cover their costs, leading to zero profits. Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market.
Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish in the long run? Group of answer choices The demand for products falls over time, so firms are unable to generate revenue. Firms that experience losses try to increase supply to cover their costs, leading to zero profits. Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish in the long run?
Group of answer choices
The demand for products falls over time, so firms are unable to generate revenue.
Firms that experience losses try to increase supply to cover their costs, leading to zero profits.
Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market.
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education