Figure 12-6
-Refer to Figure 12-6.Which panel best represents the perfectly competitive organic produce market's transition to the long run when some firms in the market are earning economic profits?

Question

Figure 12-6 
-Refer to Figure 12-6.Which panel best represents the perfectly competitive organic produce market's transition to the long run when some firms in the market are earning economic profits?

Quizplus · Accepted Answer

In the long run, firms in a perfectly competitive market will earn zero economic profits. Panel B shows that the market price has fallen, causing the quantity supplied to increase and the quantity demanded to decrease. This will continue until the market reaches equilibrium, where the quantity supplied equals the quantity demanded and firms are earning zero economic profits.

Figure 12-6 -Refer to Figure 12-6.Which Panel Best Represents the Perfectly Competitive