Graph 14-9
-Refer to Graph 14-9.When the market is in long-run equilibrium at point A in panel (b), the firm represented in panel (a) will:

Question

Graph 14-9 
-Refer to Graph 14-9.When the market is in long-run equilibrium at point A in panel (b), the firm represented in panel (a) will:

Quizplus · Accepted Answer

In long-run equilibrium, the firm will earn zero economic profit, meaning it will be covering all of its costs including opportunity costs. It will not exit the market, as there are no abnormal profits to attract entry nor losses large enough to cause exit. It will also not earn negative accounting profit, as this would imply it is not even covering its explicit costs. Therefore, the best choice is B.