If an industry has low barriers to entry for firms, what are the implications fo

Question

If an industry has low barriers to entry for firms, what are the implications for long run economic profits and losses for that industry? o In the long run,frms will make normal profit because of the low barriers to entry and exit O In the long run, firms will be able to sustain economic profit because of the low barriers to entry and exit 0 in the long run, firms will still be able to produce while sustaining economic loss because of the low barriers to entry and exit O none of the above Question 4 1 pts Which of the following industries is most likely in perfect competition? The market for unlabeled peaches The market for laptop computers The market for air travel The market for pasoline

Explanation / Answer

3. In the long run, firms will make normal profit because of low barriers to entry and exit.

If in short run, firms are earning positive profit then in long run, new firms enter into the market because of low barriers and this process continues till economic profit reduces to zero.

4. The market for unlabeled peaches

Unlabeled peaches make good of all sellers equal in shape, size so represent perfectly competitive market.

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