A firm's price equals marginal cost in the short run, long run, or both? Explain?
Question:
A firm's price equals marginal cost in the short run, long run, or both? Explain?
Perfect Competition:
In economics, perfect competition happens in an industry that has many firms and many sellers. The sellers are perfect competitors in that they produce goods that are perfect substitutes and they sell at the same price.
Answer and Explanation: 1
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Price is equal to the marginal cost both in the short-run and in the long-run.
In the short-run, a perfectly competitive firm maximizes its profit...
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Perfectly Competitive Market | Overview & Characteristics
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Chapter 3 / Lesson 63
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Learn the definition of perfect competition and understand how a perfectly competitive market works. Study the characteristics of a perfectly competitive market with examples.
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