Economy, asked by singhsourabh27795, 7 months ago

freedom of entry and exit

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Answered by singhanujftp

1

Freedom of Entry's signifies that there are no barriers to the entry of new firms into industry. When the existing firms are earning abnormal profits, the new firms, attracted by the prospects of profit, enter the industry. This raises market supply, which in turn, leads to fall in market price and consequently profits. The entry constinues till each firm is earning just the normal profits.

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