In a perfectly competitive market, the firm is in long-run equilibrium at the output where?

Answer Details

In a perfectly competitive market, the firm is in long-run equilibrium at the output where the average cost is minimum. This is because in the long run, firms can adjust their production levels and there are no barriers to entry or exit from the market. As a result, firms can produce at the lowest possible average cost. At this point, the firm is producing at the most efficient level and is earning normal profits. If the firm were to produce more or less than this output level, it would not be able to minimize its average cost and would either make losses or miss out on potential profits.