The long-run equilibrium in a competitive market characterised by firms with identical costs is generally characterised by firms operating at efficient scale.

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In a competitive market with firms having identical costs, they will all produce at the minimum efficient scale (MES), which results in long-run equilibrium. This is because the MES is the level of production at which average costs are minimized, and any deviation from that level would result in higher costs and lower profits for the firm. Therefore, firms in a competitive market will ultimately converge to operating at the MES.

The Long-Run Equilibrium in a Competitive Market Characterised by Firms