If you must determine the long-run equilibrium output of a perfectly competitive firm and you are permitted to see only one curve, which of the following curves is most helpful?

Question

Quizplus · Accepted Answer

In the long-run, a perfectly competitive firm will produce at the point where its average cost is at its minimum. Therefore, the long-run equilibrium output can be determined by looking at the point where the average cost curve intersects with the marginal cost curve. Therefore, the average cost curve is the most helpful curve in determining the long-run equilibrium output of a perfectly competitive firm.

If You Must Determine the Long-Run Equilibrium Output of a Perfectly