Explain the implication of free entry and free exit of a firm in the perfect competition market.
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: 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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The industry is characterised by freedom of entry and exit of firms. In a perfectly competitive market, there are no barriers to entry or exit of firms. Implication : The implication of this assumption is that given sufficient time, all firms in the industry will be earning just normal profit.........
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