What is the short-run equilibrium condition under a perfect competitive market?

The short-run equilibrium condition under a perfect competitive market is when the firm's quantity of output is such that the market price is equal to the marginal cost of production. Here are the steps to understand this:

1. In a perfectly competitive market, there are many buyers and sellers, and each seller sells an identical product. Therefore, each firm is a price taker, meaning they cannot influence the market price.

2. In the short run, some factors of production are fixed, such as capital or land. Therefore, the firm adjusts its production level by varying the variable factors like labor.

3. The firm's goal is to maximize profit. This occurs when the additional cost of producing one more unit of output (marginal cost) is equal to the additional revenue gained from selling one more unit of output (marginal revenue).

4. In a perfectly competitive market, the price is equal to the marginal revenue. This is because the firm can sell as much output as it wants at the market price.

5. Therefore, the short-run equilibrium condition is when the market price is equal to the marginal cost of production. At this point, the firm maximizes its profit. If the price were above the marginal cost, the firm could increase profit by producing more. If the price were below the marginal cost, the firm could increase profit by producing less.

6. It's important to note that this condition is for the firm's optimal output decision. The market is in equilibrium when the total quantity supplied by all firms equals the total quantity demanded by all buyers.