Which of the following conditions is true for a purely competitive firm in long-run equilibrium? A) P MC = minimum ATC. B) P MC minimum ATC. C) P = MC = minimum ATC. D) P

Question

Which of the following conditions is true for a purely competitive firm in long-run equilibrium? A) P > MC = minimum ATC. B) P > MC > minimum ATC. C) P = MC = minimum ATC. D) P < MC < minimum ATC.

Quizplus · Accepted Answer

In long-run equilibrium, a purely competitive firm will produce at the point where P=MC in order to maximize profit. At this point, the firm will also be producing at the minimum point of its average total cost curve (ATC), as it has had sufficient time to adjust its production levels and find the most efficient techniques. Therefore, P=MC=minimum ATC.

Which of the Following Conditions Is True for a Purely