In the long run in perfect competition ?
Correct answer: A. price = average cost = marginal cost
- A. price = average cost = marginal cost
- B. price = average cost = total cost
- C. price = marginal cost = total cost
- D. Total revenue = Total variable cost
Explanation
Long-run competitive equilibrium occurs where price equals marginal cost and average total cost at its minimum, so firms earn zero economic profit. Here “average cost” is understood as average total cost.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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