In long-run equilibrium in perfect competition,price is:
A)greater than average total cost.
B)equal to average total cost at an output below the point where average total cost is minimized.
C)equal to average total cost at its minimum.
D)equal to average total cost at an output above the point where average total cost is minimized.

Question

Quizplus · Accepted Answer

In long-run equilibrium in perfect competition, price is equal to the minimum point on the average total cost curve. This occurs where the marginal cost curve intersects the average total cost curve at its lowest point, ensuring that firms earn only a normal profit. Thus, choice C is the correct answer.

In Long-Run Equilibrium in Perfect Competition,price Is