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Questions › UoH › UoH 2012 › Q98
1 mark, −0.33Microeconomics › Perfect competition › Long-run equilibrium, entry and exitModerateabout 1 min

UoH 2012 Question 98: Perfect competition

When both the perfectly competitive firm and industry are in long run equilibrium

Where P = price of output, MR = Marginal Revenue, SAC Short Run Average Cost, SMC = Short Run Marginal Cost, LAC = Long Run Average Cost

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Perfect competition has come up 115 times in 7 exams since 2006.

What this question tests

This question is on Long-run equilibrium, entry and exit, part of Perfect competition in Microeconomics.

Why free entry drives profit to zero in the long run, and what that implies for the number of firms and industry supply.

TestStop has 14 past-paper questions on this subtopic; the nearest in year are below.

  • GATE 2021 · Q15Assuming that external economies exist, when demand increases in a perfectly competitive market, in the…
  • GATE 2021 · Q38The long-run cost function of all identical firms in a perfectly competitive industry is given by…
Practise Perfect competitionMore on Long-run equilibrium, entry and exit

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Question from the UoH 2012 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.