Asked by Jared Jacobson on Jun 19, 2024
Verified
Under perfect competition in the long run,price is equal to
A) marginal revenue.
B) marginal cost.
C) average total cost.
D) All of the choices are equal to price under perfect competition.
Marginal Revenue
The revenue increment achieved by selling an extra unit of a product or service.
Marginal Cost
The expense associated with manufacturing an additional unit of a product or service.
Average Total Cost
The sum of all production expenses (both constant and fluctuating) divided by the overall output quantity.
- Understand the price, marginal revenue, average total cost, and marginal cost under perfect competition.
Verified Answer
RA
Radhika agarwalJun 22, 2024
Final Answer :
D
Explanation :
Under perfect competition in the long run, the industry supply curve intersects the demand curve at the point where price is equal to the minimum point of the average total cost curve. This implies that price is equal to both marginal revenue and marginal cost at this point. So, options A and B are correct. Additionally, since price is also equal to the minimum point of the average total cost curve, option C is also correct. Hence, all of the choices are equal to price under perfect competition. Therefore, the correct answer is D.
Learning Objectives
- Understand the price, marginal revenue, average total cost, and marginal cost under perfect competition.
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