When a perfectly competitive market is in long-run equilibrium,

Question

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In a perfectly competitive market, all firms are price-takers and produce at the minimum point of their average total cost curve. This means that economic profit is zero in the long run, as any firm that earns a profit will attract new firms to enter the market and compete until profits disappear. Similarly, any firm incurring a loss will exit the market, reducing supply and driving prices up until all firms are once again breaking even. Therefore, in long-run equilibrium, all firms in a perfectly competitive market make zero economic profit.

When a Perfectly Competitive Market Is in Long-Run Equilibrium