Long run equilibrium in perfect competition?  Business and
management discussion, revision, exam and homework help.  This
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Avatar     • Exalted Member     • Posts: 285     Long run
equilibrium in perfect competition?     Ok, I understand that
abnormal profits, or losses, won't be sustained in the long run
in a PC market.      In the long run the MC curve will cross the
optimum point of the ATC curve as well as the MR line at the
same time so AR=AC and profits are 'normal'.      What I don't
understand is, is this the optimum point of the LRAC curve, or
just of the ATC curve, which resides at a particular point
(above the MES) on the LRAC?      Because my notes from my
teacher say it's the 'long run cost curve' but it wouldn't make
sense if it was the lowest point of the LRAC (the MES) as one
firm cannot produce up to that level in PC surely?      I'm also
confused over whether there can be both a separate industry and
a firm's LRAC?     Last edited