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Bienstar Counseling Services
on Oct 27, 2024
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In long-run equilibrium in a perfectly competitive market,all firms will be operating at their lowest possible average total cost.
Long-run Equilibrium
The condition in which, considering full adjustments in the market, the quantity supplied equals the quantity demanded at the prevailing market price.
Perfectly Competitive
A market structure characterized by many small firms, identical products, free entry and exit, and full information, leading to firms being price takers.
- Investigate the criteria necessary for a long-term balance in an environment of perfect competition.
- Describe the relationship between price, average total cost, and marginal cost in determining firm profitability.
Verified Answer
SJ
Learning Objectives
- Investigate the criteria necessary for a long-term balance in an environment of perfect competition.
- Describe the relationship between price, average total cost, and marginal cost in determining firm profitability.
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