A firm in a long-run equilibrium state
A)produces at the minimum of average variable cost.
B)produces at the minimum of marginal cost.
C)suffers accounting profit losses.
D)enjoys economies of scale.
E)makes no economic profit.

Question

Quizplus · Accepted Answer

In a long-run equilibrium state, a firm is earning only normal profit or zero economic profit. This means that the firm's total revenue is exactly equal to its total costs, including both explicit and implicit costs. Therefore, the firm is not making any economic profit.

A Firm in a Long-Run Equilibrium State