Which of the following will not hold true for a competitive firm in long-run equilibrium?
A)P equals AFC.
B)P equals minimum ATC.
C)MC equals minimum ATC.
D)P equals MC.

Question

Quizplus · Accepted Answer

In long-run equilibrium for a competitive firm, price (P) equals marginal cost (MC) and equals the minimum average total cost (ATC), but it does not necessarily equal average fixed cost (AFC) since AFC can approach zero as output increases.

Which of the Following Will Not Hold True for a Competitive