Question

explain why an imperfectly competitive firm cannot achieve a perfectly competitive long run equilibrium

Answer 1

Answer - In the imperfectly competitive market , the products sold are not homogenous like the competitive market. They are heterogenous in nature and thus the different price will be charged for different products unlike the constant price in competitive market. This will lead to the earning of the economic profits in the long run . The competitive firm will never earn positive economic profits in long run. Hence imperfectly competitive market cannot acheive the perfectly competitive long run equlibrium because it cannot equate Price = AC unlike the competitive market.