In perfect competition, an economic profit can be earned
A) only in the long run
B) only if the firm is efficient
C) only in the short run
D) never
E) always

Question

Quizplus · Accepted Answer

In perfect competition, firms can earn economic profits in the short run if market conditions are favorable. However, in the long run, the entry of new firms into the market drives these profits to zero.

In Perfect Competition, an Economic Profit Can Be Earned