Asked by
Kenneth Reina
on Oct 08, 2024
Verified
Which of the following will not hold true for a competitive firm in long-run equilibrium?
A) P equals AFC.
B) P equals minimum ATC.
C) MC equals minimum ATC.
D) P equals MC.
Long-Run Equilibrium
A situation where all factors of production and costs are variable, and all firms in a market are earning zero economic profit, indicating no incentive for market entry or exit.
Competitive Firm
A company operating in a market where there are many buyers and sellers, none of which can influence the market price.
Average Fixed Cost
The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.
- Understand the correlation between price, average total cost, and marginal cost during a long-run equilibrium.
Verified Answer
NB
Learning Objectives
- Understand the correlation between price, average total cost, and marginal cost during a long-run equilibrium.