Suppose a perfectly competitive firm faces the following situation: P = $9; output = 4,000; ATC = $8; AVC = $6; and MC = $9. Is this firm's industry in a long-run equilibrium?
A) Yes, it is in a long-run equilibrium because MC = P = MR = SRATC at long-run equilibrium.
B) Yes, it is in a long-run equilibrium because MC = P > ATC > AVC at long-run equilibrium.
C) No, it is not in a long-run equilibrium because MC = P = ATC = AVC at long-run equilibrium.
D) No, it is not in a long-run in equilibrium because MC = P = MR = SRATC at long-run equilibrium.
Correct Answer:
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