00:01
So here we are talking about competition, right? and the whole idea here is that profit has to be zero in the long run, right? so where does profit come from? profit occurs, right? profit is greater than zero if price is greater than average total cost, right? if you're high price, you can make a profit.
00:23
So we have to have some mechanism to keep prices down, right? what keeps prices down? well, if we think of a market, quantity and price, demand and supply, the thing that can get prices down is a decrease in supply, right? so the key thing here is a, no barriers to entry or exit.
00:49
That's the correct answer.
00:51
And the idea is, because if the price is high, this means that firms enter.
01:01
And when firms enter, the supply curve goes out...