Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
A) Consumer and producer surplus will be maximized.
B) P = MC = lowest AVC.
C) The minimum willingness to pay equals the maximum acceptable price.
D) We would expect all of these to occur in the long run in a purely competitive market.

Question

Quizplus · Accepted Answer

In a purely competitive market in long-run equilibrium, consumer and producer surplus are maximized because firms produce at the lowest point on their average total cost curve, and price equals marginal cost (P = MC), leading to allocative and productive efficiency.

Which of the Following Outcomes Is Consistent with a Purely