Which of the following statements is true?
A)A long-run competitive equilibrium can only be achieved in constant-cost industries.
B)When an industry achieves a long-run competitive equilibrium, industry output will not change in the future.
C)A long-run competitive equilibrium outcome is not economically efficient.
D)When an industry reaches a long-run competitive equilibrium, the typical firm in the industry breaks even.

Question

Quizplus · Accepted Answer

When an industry reaches a long-run competitive equilibrium, the typical firm in the industry breaks even because in the long run, firms can adjust their inputs to produce at minimum average total cost. This leads to zero economic profit, which means that firms are covering all their costs but not earning any additional profit.

Which of the Following Statements Is True