In the long run,firms in a perfectly competitive market produce:

Question

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In a perfectly competitive market, firms produce where price equals marginal cost (P=MC) in the long run. This is because if a firm were to produce at a quantity where price is greater than MC, other firms would enter the market, increase supply, and drive the price down. Similarly, if a firm were to produce at a quantity where price is less than MC, it would be losing money and would exit the market. Thus, in the long run, firms in a perfectly competitive market earn zero economic profits and produce at a quantity where P=MC.

In the Long Run,firms in a Perfectly Competitive Market Produce