A perfectly competitive firm cannot make economic profits in the long run because:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, there are no barriers to entry, meaning that new firms can easily enter the market, increasing the supply of the product and driving down the price. This prevents any firm from making economic profits in the long run as they will eventually be forced to lower their prices to compete with new entrants.

A Perfectly Competitive Firm Cannot Make Economic Profits in the Long