Asked by
Daylon Keith
on Nov 27, 2024Verified
When a purely competitive industry is in long-run equilibrium, which statement is true?
A) Average total cost is less than marginal cost.
B) Price and average total cost are equal.
C) Marginal cost is at its maximum level.
D) Marginal revenue is greater than price.
Long-Run Equilibrium
A state where all factors of production and inputs can be adjusted by firms, and no economic forces are inducing firms to change their output or production levels.
Average Total Cost
The cost per unit is determined by dividing the overall production costs, which include both fixed and variable expenses, by the total units manufactured.
Marginal Cost
The supplementary expenditure incurred by making one more unit of a product or service.
- Recognize the conditions under which long-run equilibrium is achieved in a purely competitive market.
Verified Answer
AS
Learning Objectives
- Recognize the conditions under which long-run equilibrium is achieved in a purely competitive market.