Perfectly competitive firms ____ earn zero economic profit in long-run equilibrium because ____.
A. always; firms in perfectly competitive industries always maximize output and so flood the market until the equilibrium price of output is driven to zero
B. sometimes; the demand curve for an individual perfectly competitive firm may or may not cross the company’s long-run average total cost curve at its lowest point
C. always; firms enter whenever their economic profit is positive and exit whenever it’s negative, so in long-run equilibrium economic profit must always be zero
D. never; no firm would be willing to produce if it received zero economic profit
Answer: C
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