In the long-run equilibrium of a competitive market,the number of firms in the market adjusts until the market demand is satisfied at a price equal to

Question

Quizplus · Accepted Answer

In the long-run equilibrium of a competitive market, firms will continue to enter or exit the market until the remaining firms are operating at the minimum point of their average total cost curves. At this point, the price equals the minimum of average total cost of the marginal firm, which means that the firms are earning zero economic profits. Therefore, the correct choice is C, the minimum of average total cost of the marginal firm.

In the Long-Run Equilibrium of a Competitive Market,the Number of Firms