Question

In the long run, firms in a perfectly competitive industry are most likely to: A)suppress innovative products to earn a positive economic profit. B)continue to earn positive economic profit because of barriers to entry. C)have a positively sloped average revenue curve. D)earn zero economic profits and produce at minimum cost. E)earn negative economic profits and exit the market.

Answer 1

D - earn zero economic profits and produce at minimum cost

Step-by-step explanation:

In the long run, a perfectly competitive firm earns zero profit or normal profit.

In the short run, if a perfectly competitive firm is earning abnormal profits, new firms would enter into the industry. This would drive the abnormal profits down to normal profit.