In short-run equilibrium in a perfectly competitive market, firms always make zero economic profits.

Question

Quizplus · Accepted Answer

In the short-run equilibrium of a perfectly competitive market, firms can make positive economic profits, zero economic profits, or even incur losses. This is because in the short run, at least one factor of production is fixed, leading to varying levels of profitability depending on the market price relative to the firm's average total cost.

In Short-Run Equilibrium in a Perfectly Competitive Market, Firms Always