You are currently on your summer break. You could either enjoy your summer in Hawaii with your friends or open a sausage stall at the local market with your mom, knowing that the market for sausages is perfectly competitive.
1 Going to Hawaii with your friends is your explicit cost when deciding to enter the market.
2 If you and your mom decide to open a sausage stall, your demand curve as a seller is perfectly elastic.
3 If you and your mom are expecting to gain a normal profit, you should definitely not enter the market.
Which of the above statements are true?
Only 1 is true.
Only 2 is true.
Both 1 and 2 are true.
Both 2 and 3 are true.
All three are true.