Economics · Market Structures
In a perfectly competitive market, short-run equilibrium occurs when:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Firms restrict output to maximize profits above their average total cost.
- 2Firms face downward-sloping demand curves, allowing for price-setting behavior.
- 3Firms produce where marginal cost equals price, but may still earn supernormal profits or incur losses.✓
- 4Firms can adjust all input levels and operate at the minimum average total cost.
Correct answer
Firms produce where marginal cost equals price, but may still earn supernormal profits or incur losses.
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