In the long run, all firms in a perfectly competitive industry

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In the long run, firms in a perfectly competitive industry will produce at the minimum point of their average total cost curve, resulting in zero economic profits. Therefore, they will break even. In the short run, firms may earn economic profits or suffer losses due to fluctuations in demand and supply, but in the long run, the market will adjust to eliminate such profits or losses. Differentiated products are not sold in perfectly competitive industries, as all firms sell identical products.

In the Long Run, All Firms in a Perfectly Competitive