In a perfectly competitive market,the long-run market price is ________.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, there are no barriers to entry or exit of firms, which means that in the long run, firms will enter when there are profits to be made and exit when there are losses. This drives the market price towards the minimum average cost of the industry, where firms can produce at the lowest cost possible and still make a normal profit. Therefore, the long-run market price in a perfectly competitive market is equal to the minimum average cost of the industry.

In a Perfectly Competitive Market,the Long-Run Market Price Is ________