In long-run equilibrium under perfect competition,

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In long-run equilibrium under perfect competition, the demand curves facing individual firms will fall to the level of minimum average cost (AC). This is because in a perfectly competitive market, there are no barriers to entry or exit, and any profits or losses in the short run will incentivize firms to either enter or leave the market, respectively. As more firms enter, the industry supply will increase, causing the price to fall until it reaches the minimum point on the AC curve. At this point, firms will be earning only normal profits and there will be no further incentive for firms to enter or exit the market. Therefore, the demand curve facing each individual firm will be tangent to its AC curve at the minimum point, ensuring that each firm is producing at the lowest possible cost.

In Long-Run Equilibrium Under Perfect Competition