Question

A firm in the perfect competition market will attain equilibrium in the long run when demand curve will _____________.

• A. be tangent to AC curve at the minimum point
• B. lie to the right of the AC curve and intersect it
• C. lie to the right of the AC curve and intersect it twice
• D. both a & c

Answer 1

The correct option is A be tangent to AC curve at the minimum point

In the long run the perfect competition equilibrium is given by the point P = MC = AC (point S). The marginal revenue curve is the demand curve as firms are price takers.