Figure 42.2
-Under perfect competition the individual firm's economic profit is

Name: Figure 42.2 -Under perfect competition the individual firm's economic profit is
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Question

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Under perfect competition, firms are price takers and can only earn normal profit in the long run, which is an economic profit of zero. This is because any economic profit would attract new firms into the industry, increasing supply, lowering the price, and eliminating the economic profit.

Figure 42.2 -Under Perfect Competition the Individual Firm's Economic Profit Is