NABTEB Economics 2024 Objective — Question 21
Question 21 of 50 from the National Business and Technical Examinations Board (NABTEB) Economics 2024 Objective paper, with the correct answer and a full explanation.
Advertisement
Firms in perfect competition break even in the long-run because
- A. A. new firms can not enter the market due to copyright laws
- B. B. more firms can enter the industry due to attractive profitsCorrect
- C. C. marginal cost at all levels
- D. D. profits are not enough to repay loans
Explanation
A perfect competition is a market structure where neither the buyer nor the sellers can influence the prices of goods and services sold in the market because they are many in number and identical goods are sold in them. However, in this market, abnormal profit is realized in the short-run and break-even (Normal profit) in the long-run.
Advertisement
Sign up free to unlock
- Score tracking
- Practice history
- Saved questions
- Progress dashboard
- Personalized sessions
- Weak-topic breakdown
…and/or go further with premium services and No Ads.