It is possible to have an industry in which all firms make zero economic profits in long-run equilibrium.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, where there are no barriers to entry or exit and information is freely available, firms will enter the market if there are profits to be made and exit if there are losses. This process will continue until all firms in the industry are earning zero economic profits in the long run.

It Is Possible to Have an Industry in Which All