**Economic Assessment: Concepts in Competitive Markets****08. Which of the following holds for a perfectly competitive firm that is in long-run competitive equilibrium?**- A. P = MC- B. SRATC = LRATC- C. P = SRATC- D. MR = MC- E. all of the above**09. The marginal revenue curve for the perfect competitor is equal to which of the following?**- A. the supply curve- B. the demand curve- C. both the supply and demand curves- D. neither the supply nor the demand curve---**Explanation of Terms:**1. **P = MC:** This represents the condition where the price (P) equals the marginal cost (MC) in a perfectly competitive market. This is crucial for achieving allocative efficiency. 2. **SRATC = LRATC:** This denotes that the Short-Run Average Total Cost (SRATC) equals the Long-Run Average Total Cost (LRATC) in the long-run competitive equilibrium.3. **P = SRATC:** Indicates that in long-run equilibrium, the price (P) is equal to the Short-Run Average Total Cost.4. **MR = MC:** This is the condition where marginal revenue (MR) equals marginal cost (MC), which is essential for profit maximization.Additionally, understanding the marginal revenue curve in perfect competition is key, as it typically relates to the demand curve that the perfect competitor faces (option B). These conditions ensure that firms in a competitive market are producing at the most efficient output levels, neither making economic profit nor loss, and are utilizing resources in an optimal manner.

08. Price is equal to marginal cost is long run competitive equilibrium condition of a perfectly…

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08. Which of the following holds for a perfectly competitive firm that is in long-run competitive equilibrium?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Question

**Economic Assessment: Concepts in Competitive Markets**

**08. Which of the following holds for a perfectly competitive firm that is in long-run competitive equilibrium?**
- A. P = MC
- B. SRATC = LRATC
- C. P = SRATC
- D. MR = MC
- E. all of the above

**09. The marginal revenue curve for the perfect competitor is equal to which of the following?**
- A. the supply curve
- B. the demand curve
- C. both the supply and demand curves
- D. neither the supply nor the demand curve

---

**Explanation of Terms:**

1. **P = MC:** This represents the condition where the price (P) equals the marginal cost (MC) in a perfectly competitive market. This is crucial for achieving allocative efficiency.

2. **SRATC = LRATC:** This denotes that the Short-Run Average Total Cost (SRATC) equals the Long-Run Average Total Cost (LRATC) in the long-run competitive equilibrium.

3. **P = SRATC:** Indicates that in long-run equilibrium, the price (P) is equal to the Short-Run Average Total Cost.

4. **MR = MC:** This is the condition where marginal revenue (MR) equals marginal cost (MC), which is essential for profit maximization.

Additionally, understanding the marginal revenue curve in perfect competition is key, as it typically relates to the demand curve that the perfect competitor faces (option B).

These conditions ensure that firms in a competitive market are producing at the most efficient output levels, neither making economic profit nor loss, and are utilizing resources in an optimal manner.

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