In long-run perfectly competitive equilibrium, which of the following is false?
A)There is efficient, low-cost production at the minimum efficient scale.
B)Economic surplus is maximised.
C)Firms earn economic profit.
D)Economies of scale are exhausted.

Question

Quizplus · Accepted Answer

In long-run perfectly competitive equilibrium, firms earn zero economic profit. This is because there are no entry barriers, and any economic profit earned in the short run will attract new firms to enter the market, which will increase supply and drive down prices until economic profit becomes zero. Therefore, option C is false.

In Long-Run Perfectly Competitive Equilibrium, Which of the Following Is