Which of the following is true of a perfectly competitive firm?
A) The firm is a price maker.
B) If the firm wishes to maximize profits it will produce an output level in which total revenue equals total cost.
C) The firm will not earn an economic profit in the long run.
D) The firm's short-run supply curve is its MC curve below its AVC curve.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms can only earn normal profits in the long run due to the entry and exit of firms, which drives economic profits to zero.

Which of the Following Is True of a Perfectly Competitive