A market winch the existing firm makes only normal profit as it cannot set a price above AC without attracting new entrants among the absence of barriers to entry and exit
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Assumptions
No barriers to entry and exit, potential for competition, new firms have access to all FOP's, the number of firms is irrelevant and doesn't effect the outcome in terms of price
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Hit and run competition
When firms can enter the market at low cost attracted by high profits and then leave when the profits fall
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Other cards in this set
Card 2
Front
Assumptions
Back
No barriers to entry and exit, potential for competition, new firms have access to all FOP's, the number of firms is irrelevant and doesn't effect the outcome in terms of price
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