In perfect competition, _______ profits in long-run equilibrium will be _______.

Question

Quizplus · Accepted Answer

In perfect competition, firms earn only normal profits in the long run equilibrium, which means that all implicit and explicit costs are covered and there is no economic profit. Therefore, the economic profits will be zero. Accounting profits may be negative if the explicit costs exceed the explicit revenues, but economic profits will still be zero as long as the implicit costs are covered.

In Perfect Competition, _______ Profits in Long-Run Equilibrium Will Be