The long-term result of entry and exit in a perfectly competitive market is that all firms end up selling at the price level determined by the lowest point on the
A) total cost curve.
B) average variable cost curve.
C) total marginal cost curve
D) average cost curve.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms enter and exit the market until they can no longer make economic profits or suffer losses. This process leads to a situation where firms end up selling at a price that equals their minimum average cost, which is represented by the lowest point on the average cost curve. This ensures that firms are producing at their most efficient level and can cover all their costs, including a normal profit, but do not make economic profits in the long run.

The Long-Term Result of Entry and Exit in a Perfectly