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Economics A Level

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Question:

Why does Normal Profit exist in PC Markets in the Long Run?

Author: go kys



Answer:

-Firms in a PC Market making a Supernormal Profit will Incentivise - because there is No Barrier to Entry - more Firms into the Market. Firms supplying more leads to the Industry Supplying more leading to, eventually, a Price where there is Normal Profit. That Point will be when the Price = Lowest Point of AC


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go kys
go kys