Asked by
Christina Volta
on Oct 27, 2024
Verified
In long-run equilibrium in a perfectly competitive market,all firms will be operating at the same level of marginal cost.
Long-run Equilibrium
A state in which all factors of production and inputs can be fully adjusted, and there are no fixed variables, resulting in market supply equalling market demand.
Marginal Cost
Marginal cost is the change in total production cost that comes from making or producing one additional unit of a good.
Perfectly Competitive
Refers to a market structure where there are many buyers and sellers, all producing homogenous products, with no single participant having the power to influence the market price.
- Expound on the relationship among price, average total cost, and marginal cost in influencing the profitability of a business entity.
Verified Answer
JM
Learning Objectives
- Expound on the relationship among price, average total cost, and marginal cost in influencing the profitability of a business entity.