Question

of firms, how wil the market price adjust to it?
7. At what level of price do the firms in a perfectly competitive market supply
when free entry and exit is allowed in the market? How is equilibrium quantity
determined in such a market?​

Answer 1

In a perfectly competitive market when free entry and exit is allowed, the equilibrium price will be the same as the minimum average cost in the long run. All the firms will earn zero to normal economic profit