[amp_mcq option1=”P = MR = SAC = LAC” option2=”D = MR = SMC = LMC” option3=”P = MR = Lowest point on the LAC curve” option4=”All of the above” correct=”option4″]<\/p>\n
The correct answer is D. All of the above.<\/p>\n
In a perfectly competitive market, firms are price-takers, meaning that they cannot influence the market price of their product. This is because there are many firms in the market, all producing identical products. As a result, each firm must accept the market price as given.<\/p>\n
In the long run, perfectly competitive firms will produce at the point where marginal cost equals marginal revenue. This is because, in the long run, firms can adjust all of their inputs, including their plant size. As a result, they will be able to produce at the lowest point on their long-run average cost curve.<\/p>\n
At this point, price will equal marginal cost, which will also equal average cost. This is because, in the long run, there are no economic profits or losses. Firms will only produce if they can cover their costs, including their opportunity costs.<\/p>\n
Therefore, when the perfectly competitive firm and industry are in long run equilibrium, then P = MR = SAC = LAC.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”P = MR = SAC = LAC” option2=”D = MR = SMC = LMC” option3=”P = MR = Lowest point on the LAC curve” option4=”All of the above” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-46259","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n