Which of the Following Characterizes Long-Run Equilibrium in Perfect Competition

question 4

Multiple Choice

Which of the following characterizes long-run equilibrium in perfect competition?

• A) P = MC = ATC
• B) P = MC < ATC
• C) P > MC = ATC
• D) P = MC > ATC

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Definitions:

Physical Quantities

The measurable amount of a stock or resource, expressed in units of weight, volume, or count.

Ending Inventory

The aggregate sum of products ready for purchase at the closure of a financial period.

Perpetual Inventory System

A bookkeeping approach that immediately logs the buying or selling of inventory via computerized point-of-sale systems and enterprise asset management software.

Physical Units

A method of measuring production or inventory in terms of actual physical items or volumes, rather than monetary value or time.