Which of the following is (are)true?

Question

Quizplus · Accepted Answer

In perfect competition, firms will always operate where P = MR = MC to maximize their profits. This ensures that the price is equal to the additional cost of producing one extra unit, which means that the firm is neither overcharging nor undercharging for its products. In the long run, prices will adjust to reflect changes in production costs, which ensures that firms only earn normal profits in the long run. However, in perfect competition, price will never be less than marginal cost because this would imply that the firm is selling at a loss, which is not possible in the long run. Therefore, option A is false, and B is partially true but not the best choice.

Which of the Following Is (Are)true