In a long-run perfectly competitive equilibrium, $P = M C \text {, where } P$ is market price and MC is the marginal cost of a firm.

Question

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In a perfect competition, no single firm has the power to set the market price. Therefore, they have to accept the prevailing market price. As a result of competition, the firms in the industry will produce at the minimum point of the average total cost curve, leading to the equality between market price and marginal cost in the long run equilibrium. So the statement is true. In a long-run perfectly competitive equilibrium, firms are earning normal profits and producing at their minimum average total cost. This means that their marginal cost (MC) equals the market price (P) since they cannot charge a higher price without losing customers to their competitors. Therefore, P = MC in this equilibrium.

In a Long-Run Perfectly Competitive Equilibrium P=MC, where PP = M C \text {, where } PP=MC, where P

In a Long-Run Perfectly Competitive Equilibrium $P = M C \text {, where } P$