In long-run equilibrium under perfect competition the demand curve facing indivi
ID: 1225989 • Letter: I
Question
In long-run equilibrium under perfect competition
the demand curve facing individual firms will fall to the level tangent to the minimum average total cost curve.
price will equal minimum average fixed cost.
firms will earn economic profits due to the existence of barriers to entry.
firms will produce at the level of output where marginal revenue exceeds marginal cost by the greatest dollar amount.
a.the demand curve facing individual firms will fall to the level tangent to the minimum average total cost curve.
b.price will equal minimum average fixed cost.
c.firms will earn economic profits due to the existence of barriers to entry.
d.firms will produce at the level of output where marginal revenue exceeds marginal cost by the greatest dollar amount.
Explanation / Answer
a) The demand curve facing individual firms will fall to the level tangent to the minimum average total cost curve.
Conclusion:- In long-run equilibrium under perfect competition, The demand curve facing individual firms will fall to the level tangent to the minimum average total cost curve. (Option a)
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