8.10 : 장기 경쟁 균형 II

A long-run competitive equilibrium is achieved when three key conditions are met.

Firstly, in the long run, each firm in the market produces at its lowest average total cost, which indicates efficient operations.

This efficiency arises from equal access to resources and technology for all firms, allowing firms to function optimally.

Secondly, the market reaches a state where no firm is motivated to either enter or exit since every firm earns zero economic profit. This indicates that firms are able to cover all their costs, including the opportunity costs of capital and labor, but they do not earn profits above this level.

Lastly, the product's price is adjusted to a point where the amount supplied by the market exactly meets consumer demand.

This ensures that resources are allocated in the most effective manner, maximizing societal welfare and benefiting both firms and consumers. This level of output also avoids shortages and surpluses in the market.

In such an equilibrium, firms operate efficiently and make normal profits while consumers enjoy access to goods and services at the lowest cost.