SELECT * FROM question_mgmt as q WHERE id=10295 AND status=1 SELECT id,question_no,question,chapter FROM question_mgmt as q WHERE courseId=3 AND subId=60 AND chapterId=612 and ex_no='1' AND status=1 ORDER BY CAST(question_no AS UNSIGNED)

Question:

At what level of price do the firms in a perfectly competitive market supply when free entry and exit is allowed in the market? How is the equilibrium quantity determined in such a market?

Answer:

In the long run, due to the free entry and exit of firms, all the firms earn zero economic profit or normal profit. They neither earn abnormal profits nor abnormal losses. Thus, the free entry and exit feature ensures that in the long run the equilibrium price will be equal to the minimum of average cost, irrespective of whether profits or losses are earned in the short run. The equilibrium is determined by the intersection of consumers demand curve and the ‘P min AC’ line. At equilibrium point E, quantity supplied by each firm is qe at the price (P).


< Previous Question

Next Question >

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='60' AND ex_no!=0 AND status=1 and id!=10295 ORDER BY views desc, last_viewed_on desc limit 0,10

  • Popular questions of class 12 Micro Economics

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='60' AND ex_no!=0 AND status=1 and id!=10295 ORDER BY last_viewed_on desc limit 0,10

  • Recently Viewed Questions of Class 12 Micro Economics

Comments

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

Comment(s) on this Question


Important links

Quick Links

Resources

Support