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Explain why the statement below is true. Please provide as much detail as you can. Clearly state all assumptions

you need to provide your argument.

"In a perfectly competitive market, at every point of the market sup- ply curve, every individual producer optimally decides whether to tem- porarily shut down or not and chooses a quantity that maximizes its profit given the available technology. Ironically, the profit of every individual producer in the market is zero in the long run."

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The statement is true because the firms in a perfect competition have some power to decide the time they... View the full answer

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