Answer to Question #231241 in Microeconomics for Yaya

Question

In the case of profit maximising firms, price

[1] equals average fixed cost.

[2] equals marginal cost.

[3] exceeds marginal revenue.

[4] equals average variable cost.

Answer 1

• The answer is  [2] equals marginal cost

In the long run, profit maximizing firms in perfectly competitive market run at point where the marginal cost matches the price. This implies that firms in this market are allocative efficient.