Will a profit maximising firm in a competitive market produce a positive level of output in the long run if market price is less than the minimum AC ? Give an explanation.

Will a profit maximising firm in a competitive market produce a positi

1.	Will a profit maximising firm in a competitive market produce a positive level of output in the long run if market price is less than the minimum AC ? Give an explanation.
Answer» Solution :No, because in the LONG RUN all firms enjoy normal profits due to free entry and exit i.e., PRICE = AC. If market price is LESS than AC, the FIRM will never operate.