Economics · Market Structure & Perfect Competition
Why does a firm under perfect competition continue to operate in the long run despite earning only normal (zero economic) profits?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The firm operates at a socially optimum level of output in the long run.
- 2The firm achieves maximum productive efficiency in the long run.
- 3The opportunity cost of self-owned factors of production is already included and recovered.✓
- 4All firms operate under identical cost conditions in the long run.
Correct answer
The opportunity cost of self-owned factors of production is already included and recovered.
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