32.A perfectly competitive market in the short-run will be in equilibrium, where A. MC = AC B. MC = MR C. MC = zero D. MR=AR
Question
32.A perfectly competitive market in the short-run will be in equilibrium, where A. MC = AC B. MC = MR C. MC = zero D. MR=AR
Solution
In a perfectly competitive market, the short-run equilibrium condition is where Marginal Cost (MC) equals Marginal Revenue (MR). This is because firms in a perfectly competitive market are price takers and will produce up to the point where the cost of producing an additional unit (MC) equals the revenue gained from selling that additional unit (MR). Therefore, the correct answer is B. MC = MR.
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