If all firms have the same costs of production, then in long-run equilibrium,
A)price exceeds average total cost for all firms.
B)price exceeds marginal cost for all firms.
C)some firms may earn positive economic profits.
D)all firms have zero economic profits and just cover their opportunity costs.

Question

Quizplus · Accepted Answer

In long-run equilibrium, all firms have the same costs of production, so they will all produce at the minimum point of their average total cost curves. At this point, price will be equal to the minimum average total cost. Therefore, firms will have zero economic profits and will just cover their opportunity costs.

If All Firms Have the Same Costs of Production, Then