Concept
Version 8
Created by Boundless
Conditions of Perfect Competition
Perfect Competition in the Long Run
In the long-run, economic profit cannot be sustained. The arrival of new firms in the market causes the demand curve of each individual firm to shift downward, bringing down the price, the average revenue and marginal revenue curve. In the long-run, the firm will make zero economic profit. Its horizontal demand curve will touch its average total cost curve at its lowest point.
Source
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"Economics Perfect competition."
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