Long Term Economic Profit for Perfectly Competitive market When we consider a perfectly competitive market, in the short run we will run a firm if the total economic profit though negative till price is above shutdown point.In long run we will run at an equilibrium where total economic profit is 0. I am not able to understand why would we run a firm if the profits are negative or 0 ?
This is because we are talking about economic profit not accounting profit.
An economic profit takes into account opportunity cost. If you are skilled programmer that can earn $\\\$100000$ per year being employed at Google then doing something else like operating your own business incurs an opportunity cost of $\\\$100000$ per year.
Hence in this situation if the person would set up perfectly competitive business, the business would still record $\\\$100000$ accounting profit even if the economic profit would be 0.
Consequently, even in perfectly competitive business people have actual incentives to run those business.