If a market is perfectly competitive and is in longrun equil

If a market is perfectly competitive and is in long-run equilibrium, which of the following conditions does not hold?

Price is equal to the minimum long-run average cost of production.

Economic profit equals zero.

The value of the last unit of output produced is equal to the value of the resources used to produce it.

There is an incentive for additional firms to enter the market because existing firms are earning revenues in excess of the explicit costs of production.

Solution

When a perfectly competitive market is in long-run equilibrium then price prevailing in market is equal to minimum long-run average cost of production. In other words, total revenue earned by firms is equal to their total cost.

This implies that firms are earning zero economic profit.

New firms only enter the market when there exist positive economic profit in the market.

Thus, when perfectly competitive market if it is in long-run equilibrium, there is no tendency for new firms to enter the market as there exists zero economic profit in such scenario.

Therefore, the condition that there is an incentive for additional firms to enter the market because existing firms are earning revenues in excess of the explicit costs of production does not hold true if a market is perfectly competitive and is in long-run equilibrium