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In perfect competition, in the long run, there will be normal profits<\/strong>.<\/p>\n Normal profits are the minimum amount of profit necessary to keep a firm in business in the long run. They are equal to the opportunity cost of the firm’s resources, or the return that the firm’s resources could earn in their best alternative use.<\/p>\n In perfect competition, there are many firms producing identical products. This means that firms have no control over the price of their product. The price is determined by the market, and firms must accept the market price.<\/p>\n In the long run, firms can enter and exit the market freely. This means that if firms are making supernormal profits, new firms will enter the market to compete for those profits. This will increase the supply of the product, which will drive down the price. As the price falls, firms’ profits will fall until they reach the normal level.<\/p>\n Conversely, if firms are making losses, some firms will exit the market. This will decrease the supply of the product, which will drive up the price. As the price rises, firms’ profits will rise until they reach the normal level.<\/p>\n Therefore, in the long run, firms in perfect competition will only make normal profits.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Normal profits” option2=”Super normal profits” option3=”Less production” option4=”Cost will be falling” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-45883","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n