When profit-maximizing firms in competitive markets are earning profits,

A) market demand must exceed market supply at the market equilibrium price.
B) market supply must exceed market demand at the market equilibrium price.
C) new firms will enter the market.
D) the most inefficient firms will be encouraged to leave the market.

Profit-Maximizing Firms

Companies that operate with the goal of making the highest possible profit given their resources and market conditions.

Market Supply

The total amount of a specific good or service that is available for purchase in a given market at various prices, over a specified period.

Market Demand

The overall amount of a product or service that every consumer in a market is ready and capable of buying at different price levels.