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© BrainMass Inc. brainmass.com October 10, 2019, 1:47 am ad1c9bdddf
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. ...
The expert explains why there are no economic profits for perfectly competitive firms in the long run.