Free entry implies that

A) a perfectly competitive firm can never earn a profit.
B) if firms in an industry are making excessively high profits, new firms are likely to enter the industry.
C) the government regulates the number of firms that are allowed in an industry.
D) firms will always earn a profit, as new firms can enter the industry at any time they like.

Free Entry

A market condition where there are no barriers to entering an industry or market, allowing any firm to compete without restrictive licenses, patents, or regulations.

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogeneous products, and the absence of barriers to entry, leading to optimal price and output levels.

Excessively High Profits

Profits that significantly exceed the normal expected return, often seen as unreasonable or indicative of limited competition.