Question

1. The concept of competition and excess profit suggests that
   1. in any investment a certain optimum combination of land, labor, capital, and entrepreneurship exists
   2. an estimate of value should always be based on future expectations rather than past performance
   3. abnormally high profits cannot be expected to continue indefinitely into the future
   4. maximum value accrues to a parcel when a reasonable degree of social and economic homogeneity are present in a neighborhood

Answer 1

The concept of competition and excess profit suggests that abnormal profits are unsustainable in nature so a company cannot expect that abnormal profit will continue forever. Statement C is true.

this concept does not speak about the combination of land labour and capital or the maximum value of current parcel or any estimation of value on free cash flow assumptions These statements are related to another theories. So statement A and B and D are false.

So statements( C) is true.