If an industry is in long-run perfectly competitive equilibrium

Question

Quizplus · Accepted Answer

If an industry is in long-run perfectly competitive equilibrium, firms will be earning only normal profits, which means that their total revenue will be equal to their total costs, including opportunity costs. There will be no economic profits earned in the long run, as any positive profits will attract new firms to enter the industry, increasing output and driving down prices and profits. Therefore, in this scenario, no firm will be earning an economic profit.

If an Industry Is in Long-Run Perfectly Competitive Equilibrium