Given below are two statements - One is labelled as Assertion A and the other is labelled as Reason R:
Assertion (A): Every perfectly competitive firm in the long run earns normal profits only.
Reasons (R) : Market price gets fully adjusted, due to changes in the demand and the supply conditions and the resultant free entry and exit of the firms in the perfectly competitive market, so as only the normal profit persists.
In the light of the above statements, choose the most appropriate answer from the options given below :
1
Both (A) and (R) are correct and (R) is the correct explanation of (A)
2
Both (A) and (R) are correct but (R) is NOT the correct explanation of (A)
3
(A) is true but (R) is false
4
(A) is false but (R) is true