Explain the implication of free entry and free exit of a firm in the perfect competition market.
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Explain the implication of free entry and free exit of a firm in the perfect competition market.
Answer: The implication of free entry and free exit of a firm in the perfect competition market is that in this market structure no company earn an unusual profit. Each company just earns a normal profit.
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Explain the implications of ''freedom of entry and exit of firms'' under perfect competition. Solution : Freedom of Entry's signifies that there are no barriers to the entry of new firms into industry. ... The firms continue to leave till the losses are wiped out and each existing firm is earning just the normal profits.
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