Which of the following is true for a perfectly competitive firm in the long run?
A)MR = MC = ATC
B)MR = MC = AFC
C)MC = ATC = AFC
D)MR = MC ATC
E)MR = MC AVC

Question

Which of the following is true for a perfectly competitive firm in the long run?
A)MR = MC = ATC
B)MR = MC = AFC
C)MC = ATC = AFC
D)MR = MC > ATC
E)MR = MC > AVC

Quizplus · Accepted Answer

In the long run, a perfectly competitive firm will produce where MR (marginal revenue) = MC (marginal cost) in order to maximize profits. In the long-run equilibrium, the firm will also produce at the minimum point on the ATC (average total cost) curve, meaning that MR = MC = ATC.

Which of the Following Is True for a Perfectly Competitive