In a long-run perfectly competitive equilibrium, $Q ^ { d } = n q$, where $q$ is the supply of an individual firm, $n$ is the number of firms in the industry, and $Q ^ { d }$ is the market demand for a product.

Question

Quizplus · Accepted Answer

In a long-run perfectly competitive equilibrium, the market is characterized by firms earning zero economic profit and each firm producing at the minimum point of the average total cost curve. At this point, the price is equal to the marginal cost, which is equal to the average total cost. The market demand is the horizontal sum of the individual firm's supply curves, which means that $Q ^ { d } = n q$ where $q$ is the quantity supplied by an individual firm and $n$ is the number of firms in the industry. Therefore, the statement is true.

In a Long-Run Perfectly Competitive Equilibrium Qd=nqQ ^ { d } = n qQd=nq

In a Long-Run Perfectly Competitive Equilibrium $Q ^ { d } = n q$