Final answer:
It is true that when a firm is in zero-profit equilibrium, its revenue must be enough to cover all opportunity costs. In perfectly competitive markets or oligopolies with intense competition, firms will eventually reach a state where their average revenue equals average cost, leading to zero economic profits. This equilibrium includes covering both explicit and implicit costs.
Step-by-step explanation:
When a firm experiences zero-profit equilibrium, it is true that the firm's revenue must be sufficient to cover all opportunity costs. This state of zero-profit equilibrium is observed in the long-run for firms operating in a perfectly competitive market, as well as in certain conditions within oligopolies. In the conditions specified, when firms continuously expand output and cut price, they will reach a point where the price (average revenue) equals average cost, resulting in zero economic profits. This outcome is due to intense competition that erodes any positive economic profits.
Furthermore, the adjustment process towards zero-profit equilibrium occurs as positive economic profits attract new firms into the market, which intensifies competition, and leads to an eventual decline in market prices. When firms are unable to cover their average cost at the set market price, they incur losses and eventually exit the market, which can elevate the market price back to a point where remaining firms break even. Thus, zero economic profit implies that a firm is covering all economic costs, which include both explicit and implicit costs (opportunity costs).