In the short run, perfectly competitive firms _______ but in the long run, perfectly competitive firms _______.

Question

Quizplus · Accepted Answer

In the short run, perfectly competitive firms can indeed incur an economic loss due to fixed costs and market conditions. However, in the long run, the entry and exit of firms in a perfectly competitive market ensure that firms make zero economic profit, aligning with the concept of normal profit where total revenue equals total costs, including opportunity costs.

In the Short Run, Perfectly Competitive Firms _______ but in the Long