In long-run equilibrium, the typical perfectly competitive firm has no incentive to:

Question

Quizplus · Accepted Answer

In the long-run equilibrium, the firm produces at the minimum average total cost and earns only a normal profit. Therefore, it has no incentive to change its output or plant size. Also, since the market is perfectly competitive, there are no barriers to entry or exit, and hence, the firm has no incentive to enter or leave the industry. Thus, the correct choice is D, as the firm has no incentive to do any of the above.

In Long-Run Equilibrium, the Typical Perfectly Competitive Firm Has No