In Long-Run Equilibrium, the Perfectly Competitive Firm Produces

question 30

Multiple Choice

In long-run equilibrium, the perfectly competitive firm produces

• A)where P = MC = AC.
• B)at the lowest point on its long-run average cost curve.
• C)where its long-run average cost curve is tangent to its horizontal demand curve.
• D)All of the above are correct.

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Definitions:

Estimated

Approximately calculated or approximated based on available information.

February

The month that follows January and precedes March in the Gregorian calendar system.

Net Operating Income

The amount a business earns after deducting its operational costs, not including taxes and interest expenses.

Variable Costing

An accounting method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.