WAEC Economics 2024 Objective — Question 21

Question 21 of 50 from the West African Examinations Council (WAEC) Economics 2024 Objective paper, with the correct answer and a full explanation.

21. Firms in perfect competition break even in the long-run because

A. new firms cannot enter the market due to copyright laws.
B. more firms can enter the industry due to attractive profits.Correct
C. marginal revenue is greater than marginal cost at all levels.
D. profits are not enough to repay traders' loans.

Explanation

In the long run, attractive profits draw new entrants until the market is filled and no further firms enter; the market then reaches equilibrium and firms break even.

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