Meliah's Maps produces road maps in a perfectly competitive market.
What is true about the quantity of maps this firm produces in the long run?

Choose 1 answer:
(A) Marginal benefit exceeds marginal cost and marginal cost equals average total cost.
B. Marginal benefit equals marginal cost and marginal cost is greater than the average total cost.
(C) Marginal benefit equals marginal cost and the average total cost is minimized.
(D) The quantity is allocatively efficient but not productively efficient.
() Marginal benefit exceeds the marginal cost and the average total cost is minimized.

Question

Meliah's Maps produces road maps in a perfectly competitive market.
What is true about the quantity of maps this firm produces in the long run?

Choose 1 answer:
(A) Marginal benefit exceeds marginal cost and marginal cost equals average total cost.
B. Marginal benefit equals marginal cost and marginal cost is greater than the average total cost.
(C) Marginal benefit equals marginal cost and the average total cost is minimized.
(D) The quantity is allocatively efficient but not productively efficient.
() Marginal benefit exceeds the marginal cost and the average total cost is minimized.

Accepted Answer

Sure, let's break down the multiple-choice question about Meliah's Maps in a perfectly competitive market. ∻Solution∻ ‖ a ⋮ Perfect Competition: In a perfectly competitive market, firms are price takers and produce where marginal cost (MC) equals marginal revenue (MR), which is also the price (P). ‖ ‖ b ⋮ Long-Run Equilibrium: In the long run, firms in a perfectly competitive market will produce at the point where MC equals average total cost (ATC), and ATC is minimized. This is because any economic profits or losses will attract or repel firms until only normal profits are made. ‖ ‖ c ⋮ Allocative Efficiency: Allocative efficiency occurs when the price (P) equals the marginal cost (MC), ensuring that resources are allocated in the most efficient manner. ‖ ‖ d ⋮ Productive Efficiency: Productive efficiency occurs when firms produce at the lowest point on their ATC curve, minimizing costs. ‖ ∻Answer∻ ⚹ (C) Marginal benefit equals marginal cost and the average total cost is minimized. ⚹ ∻Key Concept∻ ⚹ Long-Run Equilibrium in Perfect Competition ⚹ ∻Explanation∻ ⚹ In the long run, firms in a perfectly competitive market will produce where marginal cost equals marginal revenue (price) and where average total cost is minimized. This ensures both allocative and productive efficiency. ⚹ If you have more questions or need further clarification, feel free to ask!◊What is the relationship between marginal cost and marginal benefit in a perfectly competitive market in the long run⍭ Generate me a similar question◊

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