Does a competitive long-run equilibrium require cost-minimization?
A) Yes, if firms fail to be as efficient as their competitors, they are driven out of the market.
B) No, in the long run, firms make zero profits.
C) Yes, if they didn't, even less efficient firms would enter the industry.
D) No, because competition ensures their survival.

Question

Quizplus · Accepted Answer

In a competitive long-run equilibrium, firms must minimize costs to survive. If they are not as efficient as their competitors, they will be driven out of the market due to higher costs and lower profits.

Does a Competitive Long-Run Equilibrium Require Cost-Minimization