Which of the following is true regarding the equilibrium price in perfectly competitive markets in the long run?
A)It will equal the firm's long- and short-run average costs and also its marginal cost.
B)It will equal the firm's long- and short-run average costs but not its marginal cost.
C)It will equal the firm's long-run average costs and also its marginal cost but not its short-run costs.
D)It will equal the firm's short-run average costs and also its marginal cost but not its long-run costs.

Question

Quizplus · Accepted Answer

In the long run, perfectly competitive markets reach an equilibrium where the price equals the firm's long-run and short-run average costs as well as its marginal cost, ensuring zero economic profit.

Which of the Following Is True Regarding the Equilibrium Price