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In the Long Run, a Perfectly Competitive Firm Makes Zero

question 349

Essay

In the long run, a perfectly competitive firm makes zero economic profit. What incentive does the firm have to stay in business if it is making zero economic profit?


Definitions:

Custom-Made

Specifically designed and made to an individual's specifications or requirements; tailor-made.

Enforceable Agreement

A legally binding contract that can be upheld and compelled by law in a court of justice.

Earnest

Serious in intention, purpose, or effort; sincerely zealous.

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