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Which of the following is NOT true in the long run for perfectly competitive firms? P*=SRAVC...

Which of the following is NOT true in the long run for perfectly competitive firms?

P*=SRAVC

P*=SRMC

P*=SRAC

P*=LRAC

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Answer #1

Answer

Option 1

P*=SRAVC

A perfectly competitive firm produces at MC=P=ATC in the long run and the short run AVC is below it and the firm can not produce at that point in the long run because there are no fixed costs in the long run.

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