Firms in perfectly competitive industries that are earning short-run profits will likely break even in the long run.

Name: Firms in perfectly competitive industries that are earning short-run profits will likely break even in the long run.
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Question

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In perfectly competitive markets, the entry of new firms attracted by short-run profits leads to increased supply, which lowers prices until only normal profits (break-even) are possible, eliminating economic profits in the long run.

Firms in Perfectly Competitive Industries That Are Earning Short-Run Profits