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Question Practice

In a market with free entry and exit, if existing firms begin to earn normal profits, what will likely happen next?

Attempt the question, check the explanation, and continue with similar questions to build confidence before exams.

MCQ_SA
CBSE
Class 12
Economics
Introductory Microeconomics
Market Equilibrium
Question Bank

In a market with free entry an...

Single Answer MCQ
Q-00089621

In a market with free entry and exit, if existing firms begin to earn normal profits, what will likely happen next?

1

New firms will exit the market

2

Existing firms will lower their prices

3

Nothing will change

4

New firms may enter the market

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