Which of the following is consistent with long-run equilibrium for a perfectly competitive market?
A)Average total costs of production are maximized.
B)Economic profits are positive.
C)Maximum technical efficiency is achieved.
D)Average variable costs of production are maximized.

Question

Quizplus · Accepted Answer

In long-run equilibrium for a perfectly competitive market, firms operate at their minimum efficient scale, which means they are producing at maximum technical efficiency. This is because in a perfectly competitive market, there are many firms producing identical products and no barriers to entry, so firms must produce at the lowest possible cost to remain competitive. Choices A, B, and D are not consistent with long-run equilibrium for a perfectly competitive market.

Which of the Following Is Consistent with Long-Run Equilibrium for a Perfectly