Question 3 (a) Explain the three conditions held at the long-run equilibrium in a perfectly competitive...

Question 3

(a) Explain the three conditions held at the long-run equilibrium in a perfectly competitive market with a diagram.

(b) If a firm makes zero economic profit, it will exit the market in the long run. Do you agree? Explain.

(c) What makes a firm become a natural monopolist, and how does it become a barrier to entry of new firms? Explain.

Expert Solution

Rahul Sunny answered 3 weeks ago

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