The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-Under long-run equilibrium in perfect competition, each firm operates at the minimum point of its average-variable-cost curve.

Question

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7
 
-Under long-run equilibrium in perfect competition, each firm operates at the minimum point of its average-variable-cost curve.

Quizplus · Accepted Answer

Under long-run equilibrium in perfect competition, each firm operates at the minimum point of its average total cost curve, not the average variable cost curve, to achieve maximum efficiency and zero economic profit.

The Figure Given Below Shows the Aggregate Demand and Supply