For a perfectly competitive firm, long-run equilibrium is established at the point where the firm's demand curve is tangent to the minimum point on the ATC curve.

Question

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In a perfectly competitive market, long-run equilibrium occurs where the price (determined by market demand and supply) equals the minimum point of the average total cost (ATC) curve, ensuring firms earn normal profit but no economic profit, leading to an efficient allocation of resources.

For a Perfectly Competitive Firm, Long-Run Equilibrium Is Established at the Point