If a perfectly competitive firm is producing the short- run profit- maximizing quantity and is earning positive economic profits, the firm should anticipate ______.

Question

Quizplus · Accepted Answer

In the long run, new firms will enter the market due to the positive economic profits, increasing market supply and driving down prices. Therefore, the firm should anticipate earning a competitive profit in the long run.

If a Perfectly Competitive Firm Is Producing the Short- Run