Which of the following is true about the long run operations of perfectly competitive firms?

Question

Quizplus · Accepted Answer

Perfectly competitive firms in the long run operate at the point where price equals minimum average total cost, which results in productive efficiency and allocative efficiency. This means that they are producing goods at the lowest possible cost and at a quantity that maximizes social welfare. In this case, their economic profits are zero because there are no barriers to entry or exit, and any positive profits will attract new firms to enter the market, leading to increased competition and lower prices. Therefore, all of the options A, B, and C are true for perfectly competitive firms in the long run.

Which of the Following Is True About the Long Run