[amp_mcq option1=”Price = Average Cost = Marginal Cost” option2=”Price = Average Cost = Total Cost” option3=”Price = Marginal Revenue = Total Cost” option4=”Total Revenue = Total Variable Cost” correct=”option1″]
The correct answer is: A. Price = Average Cost = Marginal Cost.
In the long run, firms in perfect competition will have zero economic profits. This means that the price of the good will be equal to the average cost of production, which is also equal to the marginal cost of production.
Option B is incorrect because average cost is not equal to total cost in the long run. In the long run, firms will have no fixed costs, so their total cost will be equal to their variable cost.
Option C is incorrect because marginal revenue is not equal to total cost in the long run. In the long run, firms will have no fixed costs, so their marginal revenue will be equal to their price.
Option D is incorrect because total revenue is not equal to total variable cost in the long run. In the long run, firms will have no fixed costs, so their total revenue will be equal to their price.