Question

"why would a producer decide to produce in a competitive market in which she will earn zero profit in the long run?"

Answer 1

Answer:

Because at zero profit, with her revenue, she can cover all her costs—explicit and implicit (opportunity cost).

Explanation:

At zero profit, the revenue covers all of its costs, including the implicit costs. Recall that implicit costs include the cost of lost wages from time working on one's own business. Hence at zero economic profit, the producer not only covers the accounting costs of production, but also covers the opportunity cost of the next best use for the resources, such as foregone wages by not working at a different job.

Answer 2

Money is not the only measure of success and not everything is transactional. A producer may choose to produce for many reasons. Among them, working with exceptional talent as well as gaining experience and getting street creds.