Since long- run economic profits for a competitive firm are always zero, it will never pay a competitive firm to adopt a cost- reducing innovation.

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Quizplus · Accepted Answer

While it is true that long-run economic profits for a competitive firm are zero, adopting a cost-reducing innovation can allow the firm to lower its production costs and increase its profits in the short run. This can provide an advantage over other firms in the market and increase market share. Additionally, if other firms also adopt the innovation, it can lead to lower prices for consumers, which can increase demand for the product and benefit the firm.

Since Long- Run Economic Profits for a Competitive Firm Are