In long-run equilibrium, at what output level does a perfectly competitive firm produce?

Question

Quizplus · Accepted Answer

In the long-run equilibrium, a perfectly competitive firm produces at the output level where average total cost is minimized. This is because in the long run, all inputs are variable, and the firm can adjust its production level to achieve the lowest possible average total cost. At this point, the firm is producing at the most efficient scale, and any deviation would result in higher costs and lower profits. Therefore, the answer is D, where average total cost is minimized.

In Long-Run Equilibrium, at What Output Level Does a Perfectly