Question

In a perfectly competitive market, the process of entry and exit will end when (i) accounting profits are zero. (ii) economic profits are zero. (iii) price equals minimum marginal cost. (iv) price equals minimum average total cost. A. (ii) and (iii) only B. (ii) and (iv) only C. (i) and (ii) only D. (i), (ii), (iii), and (iv)

Answer 1

Answer:

Answer is: ( ii ) and ( iv ) only.

Explanation:

In a perfectly competitive market , the process of entry and exit will end when the price equals minimum average total cost, resulting to zero economic profits at this point.

Please note that the labeling of your options are not too clear, so pick the option that my answer correlates with.