What is the dominant factor determining market price in the long run?
A)average costs
B)the profit level
C)the prices of inputs
D)the number of sellers in the market

Question

Quizplus · Accepted Answer

In the long run, the dominant factor determining market price is the average cost. As firms adjust their inputs and operations to achieve optimal levels of production, they will produce at the lowest possible average cost. As a result, in the long run, market price will align with the average cost of production for each firm, as firms that are unable to produce at this cost will exit the market.

What Is the Dominant Factor Determining Market Price in the Long