Economics · Market Structures
Which of the following conditions prevail in a long-run competitive equilibrium that achieves OPTIMAL RESOURCE ALLOCATION? A. Output is produced at minimum feasible long-run average cost (minimum LRAC). B. Price equals minimum LRAC (zero economic profit). C. Price equals marginal cost (allocative efficiency: P = MC). D. Firms earn supernormal profits that signal resource reallocation. E. The product-mix condition MRS = MRT is satisfied. Choose the correct answer:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A, B, C and E only✓
- 2B, C and D only
- 3A, B and C only
- 4A, C and E only
Correct answer
A, B, C and E only
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