For a firm in perfectly competitive market equilibrium:

Question

Quizplus · Accepted Answer

In a perfectly competitive market equilibrium, the price is equal to the marginal cost (P = MC) in the long run. This is because firms will enter or exit the market until economic profits are zero, resulting in a price that covers all costs, including an opportunity cost of capital. Therefore, D is the correct choice. A, B, and C are incorrect since they contradict the definition of a perfectly competitive market equilibrium.

For a Firm in Perfectly Competitive Market Equilibrium