Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish in the long run? - The demand for products falls over time, so firms are unable to generate revenue. - Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market. - Firms that experience losses try to increase supply to cover their costs, leading to zero profits.
Added by Lauren S.
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Step 1: In a perfectly competitive industry, when there is positive economic profit, new firms have an incentive to enter the market. Show more…
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