In a perfectly competitive market the process of entry or exit ends when ........

Economics- Phase (I & II) Demand and Supply , Market Structures

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In a perfectly competitive market, the process of entry or exit ends when

Firms are operating with excess capacity

Firms are making zero economic profit.

Firms experience decreasing marginal revenue

Price is equal to marginal cost.

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Explanation:

If the market has no barriers to entry, new firms will enter, increase the supply of the commodity, and decrease the price. This decrease in price leads to a decrease in the firm's revenue, so in the long-run, economic profit is zero. An economic profit of zero is also known as a normal profit.

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