Which of the following statements is not true in a perfectly competitive industry in long-run equilibrium?

Question

Quizplus · Accepted Answer

In a perfectly competitive industry in long-run equilibrium, a profit-maximizing firm produces at the output level where P = MC = LRAC. This is because in the long-run, firms have the ability to adjust their scale of production, and will exit the industry if they are unable to cover their costs. As a result, price and average total cost will be equal in the long-run equilibrium, and firms will not have an incentive to produce at any other output level. Therefore, statement A is not true, as a firm cannot simply produce at any output level where P < LRAC without incurring a loss.

Which of the Following Statements Is Not True in a Perfectly