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Logan Tankersley
on Dec 12, 2024

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When a competitive price-searcher market is in long-run equilibrium, the firms in the market will earn

A) substantial economic profits.
B) zero economic profits.
C) significant economic losses.
D) an above-normal accounting rate of return.

Long-run Equilibrium

A state in which all firms in a market are making normal profits, with no incentive for entry or exit, indicating a stable market condition.

Competitive Price-searcher Market

A market condition where firms have some power to set prices due to product differentiation, yet must actively seek out the best prices and competition exists.

Zero Economic Profits

A situation in which a firm's total revenues exactly equal its total costs, implying no excess return over the opportunity cost of resources.

  • Grasp the context and implications of competitive price-searcher markets across both short-run and long-run equilibrium scenarios.
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Andrew FellerDec 19, 2024
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