Economic profit creates an incentive for other perfectly competitive firms to the market.

profit creates an incentive for other perfectly competitive firms to enter the market. (Use one word for the blank.)

How do firms in a perfectly competitive market respond to economic profits in the market?Firms exit the marketThe number of firms remains the sameFirms enter the marketFirms increase the price of their product

If firms in a perfectly competitive industry are earning economic profits (select all that apply),  We expect firms in this industry to earn smaller economic profits in the future.   We expect to see higher cost firms exit this industry to seek greater return on their capital in other markets.   We expect new producers to stop entering the market when market price equals minimum average total cost.   Consumers' willingness to pay above market rates will create inefficiency in long-run production.

In the presence of profits, firms enter a perfectly competitive market until the market reaches the point at which the firms are generating a profit; then entry stops and the market settles into its -run equilibrium. (Make sure to put only one word in each blank.)

In the long run, a representative firm in a monopolistically competitive industry will end upMultiple Choicehaving an elasticity of demand that will be less than it was in the short run.having a larger number of competitors than it will in the short run.producing a level of output at which marginal cost and price are equal.earning a normal profit, so zero economic profit.