If a competitive firm is in short-run equilibrium, then

Question

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In the short-run, a competitive firm produces where marginal cost equals marginal revenue (MC=MR) to maximize profit. Therefore, in short-run equilibrium, choice A is correct. Choice B is incorrect because in perfect competition, firms charge the market price, which is equal to marginal cost in the long run, but may be greater or less than marginal cost in the short run. Choice C is incorrect because the firm produces where price is equal to marginal cost, not average variable cost. Choice D is also incorrect because in perfect competition, price equals both marginal revenue and marginal cost in the long run, but may be greater or less than marginal revenue in the short run.

If a Competitive Firm Is in Short-Run Equilibrium, Then