One difference between the long run and the short run in a perfectly competitive industry is that:
A)economic profit in the long run is always greater than it is in the short run.
B)economic profit in the short run is always greater than it is in the long run.
C)firms necessarily earn zero economic profit in the long run but may earn positive or negative economic profit in the short run.
D)firms necessarily earn positive economic profit in the long run but may earn positive or negative economic profit in the short run.

Question

Quizplus · Accepted Answer

In the short run, firms can earn a loss, earn a profit or break even. In the long run, the incentive to earn profit and avoid loss causes firms to enter profitable markets and exit unprofitable ones until the market settles in to a zero-profit equilibrium.

One Difference Between the Long Run and the Short Run