Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then

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In a purely competitive market, when a firm is operating where long-run average total cost is at a minimum, it is achieving productive efficiency. This situation also indicates that the market is in long-run equilibrium, where firms are earning normal profit (zero economic profit). There is no incentive for firms to enter or exit the market, hence there is no tendency for the industry to expand or contract.

Assume a Purely Competitive Firm Is Maximizing Profit at Some