In the long run perfectly competitiveA) firms will accept losses if there is the hope of someday turning a profit.B) firms will not accept anything less than a profit rate greater than the going interest rate.C) firms will accept zero economic profits.D) firms must have revenues greater than explicit and implicit costs.

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Michelle Encomienda · Accepted Answer

Final Answer : C, Explanation :  In the long run, perfectly competitive firms will accept zero economic profits. Economic profit is when revenues are greater than both explicit and implicit costs. In a perfectly competitive market, all firms have access to the same technology and resources and therefore, there is no room for firms to earn above-normal profits in the long run. Firms can only earn normal profits, which means revenues are just enough to cover costs including opportunity costs of resources. Therefore, perfectly competitive firms will accept zero economic profits in the long run.

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