If all incumbent firms and all potential firms have the same cost curves and the market is characterised by free entry and exit, the long-run:

Question

Quizplus · Accepted Answer

In the long run, with free entry and exit, firms will enter or exit the market until they are operating at minimum long-run average cost. This means that the supply curve for the market is horizontal and equal to the minimum of long-run average cost for each firm.

If All Incumbent Firms and All Potential Firms Have the Same