A competitive price-taker market in long-run equilibrium is described as efficient because firms
A) produce at the low point on their average cost curve.
B) produce where marginal cost yields a profit.
C) earn no more than the cost of capital.
D) are not profitable.

Question

Quizplus · Accepted Answer

In long-run equilibrium, firms in a competitive price-taker market produce at the low point on their average cost curve, which is the point of productive efficiency. This means they are producing at the lowest possible cost per unit.

A Competitive Price-Taker Market in Long-Run Equilibrium Is Described as Efficient