In the long run equilibrium:
A)price is equal to the minimum average cost.
B)price is greater than the minimum average variable cost.
C)price is equal to the minimum average fixed cost.
D)price is greater that the minimum average cost.

Question

Quizplus · Accepted Answer

In the long run equilibrium, firms are able to adjust all factors of production, including capital, to minimize costs. This means that price is equal to the minimum average cost, which includes both fixed and variable costs. Choosing option A correctly reflects this concept.

In the Long Run Equilibrium