The typical firm in a perfectly competitive market earns zero economic profit in the long run because: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a firms in competitive markets tend to focus on revenue rather than profit. b U. S. law is designed so that taxes on earnings will eliminate profits. c there are no barriers preventing new firms from entering the market in the long run. d it is illegal for firms in a market that is comprised of many firms to continue to earn positive economic profit.

c. there are no barriers preventing new firms from entering the market in the long run.

Explanation:

In a perfect competition, there are many buyers and sellers of homogeneous products, and there is free entry and exit in the market.

This simply means that, in a perfectly competitive market, there are many buyers and sellers (price takers) of homogeneous products (standardized products with substitute) and the market is free (practically open) to all individuals or business entities that are willing to trade all their goods and services.

In a perfectly competitive market in long-run equilibrium, a long-run equilibrium avails firms the opportunity to adjust all inputs and all fixed costs are maximized. Also, it's characterized by free entry and exit, as such there isn't a fixed number of firms. This simply means that, since the number of firms in a long-run equilibrium can change, a firm must exit the market as a result of losses i.e when the firm is unable to cover its fixed costs in the long-run while new firms are allowed entry into the market when it anticipates potential profits or gains.

However, the firms always strive to maximize profits by increasing their level of output, such that P = MC. Also, the firms wouldn't be willing to leave or enter into the market because they are not making any profit, such that P=AC.

In a nutshell, in the long run equilibrium P=MR=MC and P=AC.

Therefore, a typical firm in a perfectly competitive market earns zero economic in the long run because there are no barriers preventing new firms from entering the market in the long run.

you can put this in your 11 sentence summary

" most of the money would be invested in innovation, economic convergence."

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