After all long-run adjustments have been completed, a firm in a competitive industry will produce that level of output where average total cost is at a minimum.

Question

Quizplus · Accepted Answer

This statement is in line with the long-run equilibrium condition in perfectly competitive markets, where firms produce at the point where price equals marginal cost, which is also equal to minimum average total cost (since all firms have access to the same technology and inputs). This allows firms to earn normal profits in the long run.

After All Long-Run Adjustments Have Been Completed, a Firm in a Competitive