Economists assume that, over the long run, firms in competitive markets will earn above-average economic profits (profits after all factors of production have been paid) of zero.

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Economists assume that in a competitive market, firms will earn zero economic profits in the long run due to the process of entry and exit, which leads to equilibrium where price equals the average total cost of production. This assumption is a fundamental principle of the perfectly competitive market model.

Economists Assume That, Over the Long Run, Firms in Competitive