In the long run perfectly competitive

Question

Quizplus · Accepted Answer

In the long run, perfectly competitive firms will accept zero economic profits. Economic profit is when revenues are greater than both explicit and implicit costs. In a perfectly competitive market, all firms have access to the same technology and resources and therefore, there is no room for firms to earn above-normal profits in the long run. Firms can only earn normal profits, which means revenues are just enough to cover costs including opportunity costs of resources. Therefore, perfectly competitive firms will accept zero economic profits in the long run.

In the Long Run Perfectly Competitive