Explain the importance of free entry in market

Reference no: EM13190135

1-Explain the importance of free entry and exit in the perfectly competitive market. That is if free entry and exit did not exist, what impact would this have on the allocation of resources and on the ability of firms to earn above normal profits over time?

2-In the short run, firms that seek to maximize their market share will tend to charge a lower price for their products than firms that seek to maximize their profit. Do you agree with this statement? Explain.

Reference no: EM13190135

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