Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then

A) the firm is earning an economic profit.
B) there is no tendency for the firm's industry to expand or contract.
C) allocative but not productive efficiency is being achieved.
D) other firms will enter this industry.

Purely Competitive Firm

A business that operates in a market where there are many buyers and sellers, and it has no control over the market price of its product.

Economic Profit

The difference between a firm’s total revenue and its opportunity costs (including both explicit and implicit).

Long-run Average Total Cost

The total cost per unit of output when all factors of production are variable, and economies of scale have been achieved.