Narrbegin Exhibit 7.9 A typical firm in a perfectly competitive market
-In Exhibit 7.9, at what price is the perfectly competitive firm in long-run equilibrium?

Question

Narrbegin Exhibit 7.9 A typical firm in a perfectly competitive market  
-In Exhibit 7.9, at what price is the perfectly competitive firm in long-run equilibrium?

Quizplus · Accepted Answer

In a perfectly competitive market, the firm operates at the point where its marginal cost intersects the market price. In the long-run equilibrium, the firm earns only normal profits, which means its total revenue equals its total cost. In Exhibit 7.9, the firm's marginal cost curve intersects the market demand curve at point P, which corresponds to a price of $200. Therefore, the answer is B.