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Sir/Ma'am,
Can I have some assistance answering this question.

Can any firm in a pure competition market earn an economic profit in the long term? Why or why not?

To best expalin please consider:

*As long as losses are being sustained in an industry, firms will shut down and leave the industry, thus reducing supply. As this happens the market price rises. This price rise reduces losses for industry firms.

*In the long run the scale of a plant can be changed, but output still occurs where MC=MR.

*In the long run, equilibrium price is equal to long-run average cost, short run marginal cost, and short run average cost. profits are driven to zero.

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Characterize a perfectly competitive market.

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No, in a perfectly competitive market, a firm cannot earn any economic profit in the long run. This is because of the inherent nature of the perfectly ...

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