Suppose that the market in which bakeries compete is a perfectly competitive market. Which one of the following reasons does not explain why it is difficult for a bakery to make an economic profit in the long run?

Question

Answer

All bakeries are price takers.

Answer

All bakeries produce identical goods.

Answer

All bakeries are able to set the market price.

Answer

The threat of entry by potential bakeries.

Answer

The demand facing each bakery is perfectly elastic.

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Suppose that the market in which bakeries compete is a perfectly competitive mar...

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