When a perfectly competitive industry is not in the long-run equilibrium, all firms in the industry

Question

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In a perfectly competitive industry not in long-run equilibrium, firms may earn negative or positive economic profits depending on the market conditions. If the market price is above the average cost, firms earn positive profits, attracting new firms into the industry. If the market price is below the average cost, firms incur losses, leading some to exit the market.

When a Perfectly Competitive Industry Is Not in the Long-Run