Why do perfectly competitive firms always make normal profits in the long run? Illustrate and explain with an example of a firm under perfect competition.

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A perfectly competitive firm exists in a market in which there are many different businesses in the industry, but there is little or no difference in the products themselves, they do not influence the market, and it is not difficult for any new business to compete. An example of this is farming: the difference between a banana grown on one farm is not drastically different from a banana grown on another farm, a single banana crop is far too small to affect the worldwide market for bananas, and it is not very difficult to...

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