The following is the set of conditions is necessary for ________ for a perfectly competitive firm: P = SRMC = SRAC = LRAC.
A) short-run shut down
B) long-run profit
C) long-run production with economic losses
D) long-run equilibrium

Question

Quizplus · Accepted Answer

In a perfectly competitive market, long-run equilibrium occurs when the price (P) equals the short-run marginal cost (SRMC), the short-run average cost (SRAC), and the long-run average cost (LRAC). This condition ensures that the firm is covering all its costs and earning normal profit but no economic profit, which is characteristic of long-run equilibrium in perfect competition.

The Following Is the Set of Conditions Is Necessary for ________