When firms in a perfectly competitive market face the same costs, in the long run they must be operating
A)under diseconomies of scale.
B)with small, but positive, levels of profit.
C)at their efficient scale.
D)where price is equal to average fixed cost.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms will continue to enter until all firms are operating at their efficient scale where they are producing at minimum average total cost. This means they are not experiencing either economies or diseconomies of scale. Therefore, the correct choice is C.

When Firms in a Perfectly Competitive Market Face the Same