Upgrade to access all content for this subject
Models of perfect competition make a number of assumptions that lead to certain results.
Which assumption of perfect competition is most important for the result that firms obtain zero economic profits in the long run?
The assumption that firms face “horizontal demand curves”.
The assumption that there is free entry into the market.
The assumption that goods in the market are homogenous.
The assumption that there are many small firms competing fiercely with each other.