In the long run,
A)competitive firms' profits are zero.
B)competitive firms' variable costs are zero.
C)competitive firms' ATC curves shift upward or downward to ensure that all demand is satisfied.
D)the number of firms in the market is fixed.

Question

Quizplus · Accepted Answer

In the long run, due to free entry and exit of firms, competitive firms will continue to join and leave the market until their economic profits are zero. This means that they will earn enough revenue to cover all their costs, including opportunity costs. Therefore, in the long run, competitive firms' profits will be zero.

In the Long Run