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    COMPETITIVE FIRMS

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    Explain why there are no economic profits for perfectly competitive firms in the long run.

    PLEASE DO NOT USE CITATIONS FROM WIKIPEDIA, ENCARTA, OR WORLD BOOK

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    https://brainmass.com/economics/perfect-competition/competitive-firms-no-economic-profits-349137

    Solution Preview

    First, we will define what economic profit means.

    Economic profit is the earning (aka accounting profit) - your opportunity cost (in most cases your time). For example, if you decided not to go to college, you can work at a local bar and earn 20k/year. An accountant will tell your that your earning is 20k (which is your accounting profit), but an economist would ask, what is your best alternative to working in a bar. ...

    Solution Summary

    The expert explains why there are no economic profits for perfectly competitive firms in the long run.

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