In the long run, each firm in a competitive industry earns
A)zero accounting profits.
B)zero economic profits.
C)positive economic profits.
D)positive, negative, or zero economic profits.

Question

Quizplus · Accepted Answer

In the long run, firms in a competitive industry earn zero economic profits due to free entry and exit, which drives profits to a normal level where total revenue equals total cost, including opportunity costs.

In the Long Run, Each Firm in a Competitive Industry