In a perfectly competitive market,the price in the long run will always ________.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, producers are price takers and cannot influence the price. Therefore, the price is determined by the intersection of the supply and demand curves, and in the long run, this leads to entry or exit of firms until the industry is producing at the minimum average total cost. At this point, the price equals the minimum average total cost of the industry. Therefore, the correct answer is C, the price will always equal the minimum average total cost of the industry in the long run.

In a Perfectly Competitive Market,the Price in the Long Run