In the long-run, both perfectly competitive and monopolistically competitive firms will produce at minimum average cost.

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In the long-run, both perfectly competitive and monopolistically competitive firms will produce at minimum average cost because firms have time to adjust their production processes and adopt cost-saving technologies. In a perfectly competitive market, firms are forced to produce at minimum average cost in order to stay competitive. In a monopolistically competitive market, firms have some pricing power due to differentiation, but they still face competition from similar products, which motivates them to keep their costs as low as possible.

In the Long-Run, Both Perfectly Competitive and Monopolistically Competitive Firms