A perfectly competitive firm cannot earn an economic profit in the long run because

Question

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In a perfectly competitive market, there are no barriers to entry, which means that new firms can easily enter the market and begin producing the same product. As a result, the supply of goods in the market will increase, driving down prices and reducing profits for all firms in the industry. Eventually, the price will fall to the point where firms only earn enough revenue to cover their costs, resulting in zero economic profit in the long run. While firms may still earn accounting profits, these do not represent a true economic profit after all costs, including opportunity costs, are taken into account.

A Perfectly Competitive Firm Cannot Earn an Economic Profit in the Long