Because market price always tends back to the minimum average total cost for all identical firms in a perfectly competitive market in the long run,in theory:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, all firms are price takers and produce at the minimum average total cost. This means that all firms produce at the same cost, and therefore, in the long run, the market price will be the same for all firms regardless of the quantity produced. This results in a horizontal supply curve, and hence the answer is B.

Because Market Price Always Tends Back to the Minimum Average