Which of the following is true concerning purely competitive industries?

A) There will be economic losses in the long run because of cut-throat competition.
B) Economic profits will persist in the long run if consumer demand is strong and stable.
C) In the short run,firms may incur economic losses or earn economic profits,but in the long run they earn normal profits.
D) There are economic profits in the long run but not in the short run.

Economic Profits

The financial gain achieved when the revenue from business activities exceeds the costs, expenses, and taxes needed to sustain the activity, including opportunity costs.

Purely Competitive Industries

Markets characterized by many buyers and sellers, homogeneous products, and free entry and exit, leading to price-taking behavior.

Cut-Throat Competition

Intense competition where competitors use aggressive tactics to undercut each other’s prices and gain market share.