Question
Why is perfect competition socially efficient in the long run?
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Answer
Because P=MC and output occurs at ATCmin.
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Question
Why do firms exit in the long run when price stays below average total cost?
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Answer
They cannot cover total cost, so losses persist.
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Question
How do long-run outcomes differ between perfect and monopolistic competition?
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Answer
Both earn zero economic profit, but only perfect competition reaches ATCmin.
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Question
What profit-maximizing rule applies to every market structure?
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Answer
Produce where MR=MC.
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