In long-run equilibrium for a perfectly competitive firm, price equals which of the following?

Question

Quizplus · Accepted Answer

In long-run equilibrium for a perfectly competitive firm, price equals minimum short-run average total cost because if the price is above this level, firms would continue to enter the industry, increasing supply and driving down the price. If the price is below this level, firms would exit the industry, decreasing supply and driving up the price. Therefore, in the long run, firms will produce at the minimum short-run average total cost, which corresponds to a price equal to that cost.

In Long-Run Equilibrium for a Perfectly Competitive Firm, Price Equals