Karlee's Kreations sells handbags in a purely competitive market. Karlee's is currently breaking even. Based on this information, we can conclude that Karlee's Kreations

A) must be operating in long-run equilibrium.
B) will leave this market in the long run because no economic profits are being earned.
C) will continue operating in this market only if the market price rises.
D) may be operating in either short-run or long-run equilibrium.

Purely Competitive Market

A trading environment with a large number of consumers and providers, barrier-free entrance and departure, and a standardized product.

Long-run Equilibrium

A state where all factors of production in an economy are utilized efficiently, market supply equals demand, and no economic forces are pushing for change.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing excess revenue over the opportunity cost of resources employed.