Long-run competitive equilibrium in an industry implies that no firm:
A) is earning a normal profit.
B) is producing at the output level where price equals long-run average total cost.
C) has an incentive to enter or exit the industry.
D) is earning accounting profits.

Question

Quizplus · Accepted Answer

In long-run competitive equilibrium, firms earn normal profits, meaning they cover all costs including opportunity costs, so there is no incentive to enter or exit the industry.

Long-Run Competitive Equilibrium in an Industry Implies That No Firm