In the long run, the economic profit of a firm in a perfectly competitive market

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In a perfectly competitive market, in the long run, firms will earn zero economic profit. This is because if firms are earning positive economic profits, new firms will enter the market, increasing supply and driving down prices and profits. Conversely, if firms are incurring losses, some will exit the market, reducing supply and increasing prices until only zero economic profits are earned.

In the Long Run, the Economic Profit of a Firm