Long run equilibrium of a firm in perfect competition is reached when _________.
Long run equilibrium of a firm in perfect competition is reached when _________.
The correct option is D Price=Average cost=Marginal cost
In
perfect competition, average revenue and marginal revenue remains the same
because the price of the commodity remains the same throughout the specified
period due to which average revenue is equal to the price for a given amount of
output and marginal revenue is also equal to price as total revenue changes only
when there is any change in the quantity of the commodity sold.
Average Revenue =
total revenue/total quantity
= price x quantity / quantity
= Price.
Marginal revenue =
change in total revenue/ change in quantity sold
= price x change in quantity sold/ change in quantity sold
= Price.
Therefore, Average
revenue = Marginal revenue= Price.
In perfect competition, average revenue and marginal revenue remains the same because the price of the commodity remains the same throughout the specified period due to which average revenue is equal to the price for a given amount of output and marginal revenue is also equal to price as total revenue changes only when there is any change in the quantity of the commodity sold.
Average Revenue = total revenue/total quantity
= price x quantity / quantity
= Price.
Marginal revenue = change in total revenue/ change in quantity sold
= price x change in quantity sold/ change in quantity sold
= Price.
Therefore, Average revenue = Marginal revenue= Price.
