If a perfect competitor faces P = ATC in the long run, the firm will

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If a perfect competitor faces P = ATC, it means the firm is earning zero economic profits, also known as normal profits. In this situation, the firm is covering all its costs of production, including opportunity costs. Therefore, there is no reason for the firm to leave the industry. The firm will continue to operate in the long run, as long as it can cover its variable costs in the short run.

If a Perfect Competitor Faces P = ATC in the Long