Would a firm earning zero economic profit continue to produce, even in the long run? 怎么回答 急

Well, in perfect competition, firms are not able to raise their prices because it will simply put them into disadvantage as they have higher price than the others. One of the characteristic of perfect competition is that every firm is producing unique goods with the same price. Another important factor is that, consumers will be assumed to have perfect knowledge about the market and the firms are unlikely to make any profits.

Profit acts a price signal. When firms consider they can gain profits then they will enter the market. When there is no profit, such as perfect competition, firms are not likely to enter then.

It is not the only objective that firms are operating in the market. Cross subsidisation will be a good example as firms are cross subsidising to gain their extra market power by competiting with the other firms.

P.S: 不知道楼主想要从什么角度去看这个问题,也不知道想要中文还是英文的。题目是英文的话我就写英文吧。不是写得太详细,问题也没有很详细,所以主要弄清楚Firms' Objectives就可以了。不太确定even in the long run这