Choose the statement about the long-run equilibrium in a perfectly competitive market that is correct.

Question

Answer

The market outcome is inefficient because some firms exit while others enter.

Answer

Firms make zero economic profit, which gives them no incentive to change their output.

Answer

Firms can make positive economic profit, but they can't incur an economic loss.

Answer

Entry and exit occur, which makes the market outcome efficient.

Answer

The market outcome is efficient because firms have no incentive to change output.

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