When a perfectly competitive ﬁrm is in equilibrium in the long run, _____.
A) average cost must be lesser than marginal revenue
B) average cost must be greater than marginal revenue
C) average cost must be equal to marginal revenue
D) marginal revenue must be greater than price

Question

Quizplus · Accepted Answer

In the long run, a perfectly competitive firm will adjust its scale of operation such that its average cost (AC) is equal to the price (P), which is also equal to the marginal revenue (MR) due to the nature of perfect competition where P = MR. This condition represents the firm's long-run equilibrium, ensuring no economic profits or losses.

When a Perfectly Competitive ﬁRm Is in Equilibrium in the Long