When a purely competitive firm is in long-run equilibrium, price is equal to
A)marginal cost but may be greater or less than average cost.
B)minimum average total cost and also to marginal cost.
C)minimum average cost but may be greater or less than marginal cost.
D)marginal revenue but may be greater or less than both average and marginal cost.

Question

Quizplus · Accepted Answer

In long-run equilibrium, a purely competitive firm will adjust its output so that price equals both the marginal cost (MC) and the minimum average total cost (ATC), ensuring that the firm is producing at its most efficient point and earning normal profit.

When a Purely Competitive Firm Is in Long-Run Equilibrium, Price