Question

After all firms have entered or exited the market the perfect competition in the long run, price equals what?

A average fixed cost

B average total cost

C quantity

D all of these

Answer 1

Answer :-

In perfect competition market during long run the price is equals to Average total cost .

Option B is correct .

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Perfect competition market.

It is a form of market where there is large number of buyers and sellers of a commodity Homogeneous product is sold and its price is determined by the forces of supply and demand and individual wires for seller has no control over price .

Three vital conclusions .

1. A form under perfect competition is a price taker not a price maker.

2. Demand curve of the firm under perfect competition is perfectly elastic.

3. A form under perfect competition on only normal profit in the long run .