Option 1: (B), (A), (C), (D) -> This represents the correct chronological sequence of market adjustment under free entry and exit conditions. The process begins with (B) supernormal profits attracting new firms, followed by (A) rightward shift in supply curve as new firms enter the market, then (C) falling prices that eliminate supernormal profits due to increased supply, and finally (D) long-run equilibrium where only normal profits exist and no further entry occurs. This sequence demonstrates how perfect competition with free entry and exit leads markets to long-run equilibrium where economic profits are zero. -> correct
Arrange the given statements in chronological order stating the implications of free entry and exit assumptions in a equilibrium market. (A) Supply…
CUET UG 2025 — Economics Micro
2025mcqmedium
Arrange the given statements in chronological order stating the implications of free entry and exit assumptions in a equilibrium market.
(A) Supply curve shifts rightward, however demand remains unchanged.
(B) At the prevailing market price, each firm is earning a supernormal profit and will attract some new firms.
(C) Market prices fall, and supernormal profits are eventually wiped out.
(D) All firms in the market are earning normal profit, no more firms will have incentive to enter.
Choose the correct answer from the options given below:
Official previous-year question
Held on 3 Jun 2025 · Verified 13 Jul 2026.
Options
- A
(B), (A), (C), (D)
- B
(A), (B), (C), (D)
- C
(B), (A), (D), (C)
- D
(C), (B), (D), (A)
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