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.

A is the correct answer.

Explanation:

In the modern economy, there are different industries and for economic analysis, the industries are divided into four models based on the amount of competition in the markets, the four types are Pure competition, oligopoly, monopolistic competition, and pure monopoly. Only in the pure competition market, the competition is very high. Although there are no perfectly competitive markets in the real world, the markets related to farming, gold, and currency can be labeled as the pure competition market.