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JAMB Economics 1994 Question 26

Question 26

Market Structures

In the long run, a firm in a perfectly competitive market will make

  1. A.normal profit
  2. B.abnormal profit
  3. C.marginal profit
  4. D.no profit
Show the answer and explanation

Answer: A (normal profit)

Explanation

Free entry and exit remove any supernormal profit or loss, leaving only normal profit.