For a perfectly competitive firm at its long-run competitive equilibrium point,

Question

Quizplus · Accepted Answer

At the long-run competitive equilibrium point, the firm produces at the minimum point of its long-run average total cost curve where LAC = SAC. At this point, price (P) is equal to average revenue (AR) and marginal revenue (MR), which is also equal to both long-run average total cost (LATC) and short-run average total cost (SATC). Additionally, the firm will produce at the level where marginal cost (MC) equals price. Therefore, all the variables mentioned in option A are equal to each other at the long-run competitive equilibrium point.

For a Perfectly Competitive Firm at Its Long-Run Competitive Equilibrium