-In the long run,a perfectly competitive firm facing the same costs as in Figure 11.3 would earn ________ of economic profit.

Question

Quizplus · Accepted Answer

In the long run, a perfectly competitive firm will earn zero economic profit. This is because, in perfect competition, firms can enter and exit the market freely. If there are economic profits to be made, new firms will enter the market, increasing supply and driving prices down until economic profits are eliminated. Conversely, if firms are making losses, some will exit the market, reducing supply and driving prices up until losses are eliminated.

-In the Long Run,a Perfectly Competitive Firm Facing the Same