Question

The U-pick berry market is perfectly competitive. Suppose that all U-pick blueberry farms have the same cost curves and all are making an economic profit. What happens as time passes? What is the long-run equilibrium outcome chegg

Answer 1

As time passes, more U-pick blueberry farms will enter the market because the market is perfectly competitive and each farm is making an economic profit which will attract new farms in the market as time passes. So, supply will increase and price will decrease. Due to this, the long-run equilibrium outcome will be such that each existing farm makes an economic profit of zero as new farms will keep entering until each farm makes an economic profit of zero.