Chapter 13 Part II -- Long Run Equilibrium

by Elson Blunt on Jul 04, 2014

When a market is at long run equilibrium, supply and demand meet at the equilibrium price, and the average firm produces at its efficient scale (the ATC minimum) with zero economic profit. Economic profit is zero when the firm makes enough money (accounting profits) to exactly compensate it for its implicit opportunity costs (the value of its next best alternative).

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