Long run industry equilibrium refers to the state of a perfectly competitive market where all firms are in equilibrium and producing at the minimum point of their long-run average cost (LAC) curve. In this state, firms earn only normal profits, which occur when they are just covering their costs to remain in the market. The long-run equilibrium of the industry is reached when the price is at a level where all firms are in equilibrium and making just normal profits.
In the long run, firms can enter or exit a perfectly competitive market easily, and profits are ordinary, so there are no economic profits. The long run refers to a period of time where all factors of production and costs are variable, and the goal is to produce at the lowest cost. Firms can change production levels in response to expected economic profits by increasing or decreasing the scale of production.
In summary, long run industry equilibrium is a state of a perfectly competitive market where all firms are in equilibrium and producing at the minimum point of their LAC curve, earning only normal profits.
