In a perfectly competitive industry, if TR>TC, then in the long run A. Firms wil

Question

In a perfectly competitive industry, if TR>TC, then in the long run A. Firms will make economic profits B. Market supply will shift to the left C. There will be no change in the number of firms D. New firms will enter the industry E. Firms will exit the industry In a perfectly competitive industry, if TR>TC, then in the long run A. Firms will make economic profits B. Market supply will shift to the left C. There will be no change in the number of firms D. New firms will enter the industry E. Firms will exit the industry A. Firms will make economic profits B. Market supply will shift to the left C. There will be no change in the number of firms D. New firms will enter the industry E. Firms will exit the industry

Explanation / Answer

Answer

D. New firms will enter the industry

The perfect competitive firms earn zero economic profit in long run and if the market is in economic profit in short run then new firm will enter up to the economic profit will be zero so the market will have new firm and zero economic profit in long run

because the market is in profit

the profit=TR-TC

here the TR>TC which means the market is in profit.

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