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

diagram. (10 marks) 


(b) If a firm makes zero economic profit, it will exit the market in the long run. Do you agree? Explain. (7 marks) 


(c) What makes a firm become a natural monopolist, and how does it become a barrier to entry of new firms? Explain. (8 marks)

Top Answer

2) I disagree if a firm makes zero economic profit it can continue to operate. It can continue to operate in the short run.... View the full answer


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