When a perfectly competitive firm is in long-run equilibrium, the firm is:

Question

Quizplus · Accepted Answer

In the long-run equilibrium, a perfectly competitive firm is producing at the minimum of its long-run average total cost (LRATC) curve. This is because in the long-run, firms have the ability to adjust their inputs and scale of production, resulting in the LRATC curve being the lowest attainable average total cost in the long-run. At this point, firms are earning zero economic profit, producing the efficient quantity, and consumers are enjoying the low price.

When a Perfectly Competitive Firm Is in Long-Run Equilibrium, the Firm