Homework Answers
Answer
Option d
MR=AVC
A perfectly competitive firm, in the long run, makes zero economic profit so no firm enter and exit the market.
Profit=(P-ATC)*Q and the profit is zero so P=ATC and the firm produces at MC=P
then
P=MR=ATC=MC
there is no fixed cost in the long run so the total cost and variable costs are the same but it is called total cost and not varible cost.
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