Which of the following is the set of conditions necessary for long-run equilibrium for a perfectly competitive firm? A) P = SRMC SRMC = SRAC = LRAC C) P = SRMC = SRAC LRAC D) P = SRMC = SRAC = LRAC

Question

Which of the following is the set of conditions necessary for long-run equilibrium for a perfectly competitive firm?
A) P = SRMC < SRAC = LRAC
B) P > SRMC = SRAC = LRAC
C) P = SRMC = SRAC > LRAC
D) P = SRMC = SRAC = LRAC

Quizplus · Accepted Answer

In long-run equilibrium for a perfectly competitive firm, the price (P) equals short-run marginal cost (SRMC), short-run average cost (SRAC), and long-run average cost (LRAC). This condition ensures that the firm is maximizing profit (or minimizing losses) and that there is no incentive for new firms to enter or existing firms to exit the market.

Which of the Following Is the Set of Conditions Necessary