In the long run,the entry of new firms into a competitive market is typically caused by

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New firms are attracted to markets that are generating economic profit. Economic profit is the difference between total revenue and total opportunity costs, including both explicit (monetary) and implicit (opportunity) costs. When existing firms are earning economic profit, it signals to potential new entrants that there is an opportunity to enter the market and also capture some of that profit. Thus, the entry of new firms into a competitive market is typically caused by economic profit.

In the Long Run,the Entry of New Firms into a Competitive