Consider the following statements and select the correct answer from the given options. Assertion (A): In the short run under perfect competition,…

CA Foundation · Business Economics · MTP · January 2026
Consider the following statements and select the correct answer from the given options. Assertion (A): In the short run under perfect competition, given the market demand and market supply the industry is in equilibrium at that price which clears the market. Reason (R): In the long run all the firms in the industry earns profit.
(A) A. Both (A) and (R) are true and (R) is the correct explanation of (A)
(B) B. Both (A) and (R) are true and (R) is not the correct explanation of (A)
(C) C. (A) is true but (R) is false
(D) D. (A) is false but (R) is true

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. (A) is true but (R) is false

Topics: Price Determination in Different Markets

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