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The Theory Of The Firm Under Perfect Competition
Question
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 If the firms are earning abnormal profits, how will the number of firms in the industry change?

Answer

The number of firms will increase in the industry because new firms will be attracted to avail of abnormal profits.

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Some More Questions From The Theory Of The Firm Under Perfect Competition Chapter

Name the market structure in which firm is itself an industry.

 Define the term market as used in economics.

What is meant by monopolistic competition?

What are selling costs?

Define homogeneous product.

What is meant by differentiated product?

 Define perfect competition.

 Is the seller under perfect competition a price maker or a price taker? 

Define monopoly.  

Define market equilibrium.