Zero economic profits for a perfectly competitive firm in the long run means

Question

Quizplus · Accepted Answer

In the long run, firms in a perfectly competitive market will enter or exit until they are all earning zero economic profits. This means they are producing at the lowest possible long-run average cost and charging a price equal to their marginal cost. At this point, the market is in equilibrium and the firms are earning normal profits. Therefore, option B is the correct answer.

Zero Economic Profits for a Perfectly Competitive Firm in the Long