[amp_mcq option1=”P=MC” option2=”MR=MC” option3=”P=ATC” option4=”All of the above” correct=”option4″]<\/p>\n
The correct answer is D. All of the above.<\/p>\n
In long run equilibrium, a competitive firm will produce at the point where marginal revenue equals marginal cost. This is because the firm will continue to produce until the marginal revenue from producing an additional unit is equal to the marginal cost of producing that unit. If the marginal revenue is greater than the marginal cost, the firm can increase its profits by producing more units. If the marginal revenue is less than the marginal cost, the firm can increase its profits by producing fewer units.<\/p>\n
At the point where marginal revenue equals marginal cost, the firm will also be producing at the point where price equals average total cost. This is because the firm will only be able to produce in the long run if it is covering its average total cost. If the firm is producing at a point where price is less than average total cost, the firm will be losing money and will eventually go out of business.<\/p>\n
Therefore, in long run equilibrium, a competitive firm will produce at the point where marginal revenue equals marginal cost and price equals average total cost.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”P=MC” option2=”MR=MC” option3=”P=ATC” 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-55760","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n