The firm shown here is earning zero profits because P = ATC, so total cost and total revenue are equal. Notice also, that average total cost is minimized. This is a nice feature of perfect competition in long run equilibrium.

   If such industries were commonplace (they aren't), they would assure that production costs are nearly always minimized as are prices, since both are equal to minimum ATC. This will be discussed more fully in the section on industrial policy.

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