Question

Apple farmers are in a perfectly competitive industry. If the apple market is in a long-run equilibrium which of the following must be true? Select one:

a. P > MR = MC = AVC
b. P = MR = MC = ATC.
c. P = MR = MC = AVC.
d. PMR = MC > ATC

Answer 1

In a long-run equilibrium for a perfectly competitive industry, price (P) equals both marginal revenue (MR) and marginal cost (MC), as well as average variable cost (AVC).

Step-by-step explanation:

In a long-run equilibrium for a perfectly competitive industry, the conditions are such that price (P) equals both marginal revenue (MR) and marginal cost (MC), as well as average variable cost (AVC).

Therefore, the correct option is c. P = MR = MC = AVC.