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Answer to Question #75725 in Microeconomics for shireece

Question #75725
Explain using properly labelled diagrams, why a perfectly competitive firm will earn only normal profit in the long-run.
Expert's answer
Firms can only make normal profits in the long run, although they can make abnormal (super-normal) profits in the short run. It is because in the long run the number of firms is such that P = MR = MC = LATC and LATC is a its minimum.

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