**The long-run output of a profit-maximizing competitive firm is the point at which long-run marginal cost equals the price.
Zero economic profit – A firm is earning a normal return on its investment – ex. it is doing as well as it could by investing its money elsewhere.
**In a market with entry and exit, a firm enters when it can earn a positive long-run profit and exits when it faces the prospect of a long-run loss.
Long-run competitive equilibrium – All firms in an industry are (1) maximizing profit, (2) no firm has an incentive to enter or exit, and (3) price is such that quantity supplied equals quantity demanded.
Economic rent – Amount that firms are willing to pay for an input less the minimum amount necessary to obtain it.