What is likely to happen when firms in a competitive market have different costs

Question

Quizplus · Accepted Answer

When firms have different costs, some firms will be able to produce and sell their products at a lower cost than others. This will result in the more efficient firms earning economic profits in the long run, while less efficient firms will either break even or exit the market. This does not necessarily violate free entry and exit, nor does it make the market non-competitive. However, the long-run market supply curve may be downward sloping due to some firms exiting the market.

What Is Likely to Happen When Firms in a Competitive