Choose the correct statement.In the long-run, each firm in a competitive market with identical firms will:
i. operate at the firm's efficient scale
ii. produce at a point where Marginal Cost and Average Total Cost are equal
iii. will earn zero economic profit

Question

Quizplus · Accepted Answer

In the long run, competitive markets with identical firms will see each firm operating at its efficient scale (i), producing where Marginal Cost (MC) equals Average Total Cost (ATC) (ii), and earning zero economic profit (iii) due to the entry and exit of firms until profits are eliminated.

Choose the Correct Statement