A competitive price-taker firm would be willing to remain in the industry in the long run at zero economic profit because
A) it would find it too difficult to exit from the industry in the long run.
B) accounting profit would be negative.
C) it is covering all costs, including the opportunity cost of capital and labor.
D) its sunk costs would prevent it from leaving the industry.

Question

Quizplus · Accepted Answer

In the long run, zero economic profit means the firm is covering all its costs, including opportunity costs, which is sufficient for it to remain in the industry.

A Competitive Price-Taker Firm Would Be Willing to Remain in the Industry