Answer:
the long-run market supply curve and the short-run market supply curve and the demand curve all intersect at the same point.
Step-by-step explanation:
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the long-run market supply curve and the short-run market supply curve and the demand curve all intersect at the same point.
is above the point where the short-run market supply curve and the demand curve intersect.
shifts upward. is below the point where the short-run market supply curve and the demand curve intersect.
shifts downward.
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
When the market earns zero economic profits, the long-run market supply curve and the short-run market supply curve and the demand curve all intersect at the same point.