Assuming pure competition,which of the following are equivalents? A) MRP_L/P_L = MRP_C/P_C and P_x = 1/MC. B) MRP_L/P_L = MRP_C/P_C and P_x = AVC. C) P_x = MC and MRP_L/P_L = MRP_C/P_C = 1. D) P_x = MC and MP_L/P_L = MP_C/P_C.

Question

Quizplus · Accepted Answer

In pure competition, price equals marginal cost (P_x = MC) and both short-run and long-run marginal revenue equals price (MRP_L/P_L = MRP_C/P_C = 1). Choice C includes both of these conditions and is therefore the best choice. The other choices do not accurately reflect the conditions of pure competition.

Assuming Pure Competition,which of the Following Are Equivalents