In the long run, a firm in pure competition earns an economic profit and operates at the minimum point on its long-run average total cost curve.

Question

Quizplus · Accepted Answer

In the long run, a firm in pure competition earns zero economic profit due to free entry and exit in the market, ensuring that any economic profit is competed away, but it does operate at the minimum point on its long-run average total cost curve to be as efficient as possible.

In the Long Run, a Firm in Pure Competition Earns