At the long-run equilibrium of a competitive industry, goods are produced at ______________________ average cost.

Question

Quizplus · Accepted Answer

At the long-run equilibrium of a competitive industry, goods are produced at the lowest possible average cost, as firms are forced to operate at their efficient scale and produce at the minimum efficient scale (MES). This is where economies of scale are fully realized, resulting in the lowest average cost of production.

At the Long-Run Equilibrium of a Competitive Industry, Goods Are