Asked by
benson trinh
on Oct 08, 2024
Verified
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.
Purely Competitive Firm
A company that operates in a market where there are many buyers and sellers, each selling a homogeneous product with no single seller or buyer having the market power to influence prices.
Long-run Equilibrium
A state in which all economic forces such as supply and demand are balanced, and all firms are producing at a level where no new entrants will disrupt the market.
Minimum ATC
The lowest point on the average total cost curve, representing the most efficient scale of production for a firm.
- Acquire knowledge about the determinants of long-run equilibrium in entirely competitive markets and the implications for efficiency outcomes.
Verified Answer
LG
Learning Objectives
- Acquire knowledge about the determinants of long-run equilibrium in entirely competitive markets and the implications for efficiency outcomes.