When talking about economic profits in a perfectly competitive market,the difference between the long run and the short run is that in the short run,firms
A) can earn positive economic profits,but in the long run,firms have zero economic profits.
B) can earn negative economic profits,but in the long run,firms have zero economic profits.
C) can earn positive or negative economic profits,but in the long run,firms have negative economic profits.
D) earn negative economic profits,but in the long run,firms have positive economic profits.
E) can earn positive or negative economic profits,but in the long run,firms have zero economic profits.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms can experience both positive and negative economic profits in the short run due to market adjustments. However, in the long run, the entry and exit of firms ensure that economic profits are driven to zero, as the market reaches an equilibrium where firms only earn normal profits.

When Talking About Economic Profits in a Perfectly Competitive Market,the