When a perfectly competitive firm is in long-run equilibrium, it and all other firms are on the lowest point of their average cost curves.

Question

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In a perfectly competitive market, firms will produce at their efficient scale where marginal cost equals price. This leads to firms producing at the minimum point of their long-run average cost curve, resulting in productive efficiency. All firms in the market will have the same cost structure and will produce at the same minimum point, ensuring that there is no incentive for firms to enter or exit the market. Therefore, in long-run equilibrium, all firms in a perfectly competitive market will be on the lowest point of their average cost curves.

When a Perfectly Competitive Firm Is in Long-Run Equilibrium, It