I'm sorry, but you didn't provide the answer in 1.2.1. However, I can explain the two key features of long-run equilibrium in general and how to determine the price.

1. Zero Economic Profit: In the long run, firms will enter or exit the market until they are making zero economic profit. This means that all firms are earning just enough revenue to cover their costs, including a normal level of profit (the minimum level of profit necessary to keep firms in the market).

2. Productive Efficiency: Firms in long-run equilibrium are productively efficient. This means they produce at the lowest point on their long-run average cost curve. In other words, they cannot produce their current output level more cheaply.

To determine the price in the long-run equilibrium, you need to know where the market demand and supply curves intersect. The price at this intersection is the equilibrium price. In the long run, the supply curve is perfectly elastic (horizontal) at the minimum point of the average cost curve, so the long-run equilibrium price is equal to the minimum average cost.

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I'm sorry, but you didn't provide the answer in 1.2.1. However, I can explain the two key features of long-run equilibrium in general and how to determine the price.

1. Zero Economic Profit: In the long run, firms will enter or exit the market until they are making zero economic profit. This means that all firms are earning just enough revenue to cover their costs, including a normal level of profit (the minimum level of profit necessary to keep firms in the market).

2. Productive Efficiency: Firms in long-run equilibrium are productively efficient. This means they produce at the lowest point on their long-run average cost curve. In other words, they cannot produce their current output level more cheaply.

To determine the price in the long-run equilibrium, you need to know where the market demand and supply curves intersect. The price at this intersection is the equilibrium price. In the long run, the supply curve is perfectly elastic (horizontal) at the minimum point of the average cost curve, so the long-run equilibrium price is equal to the minimum average cost.

Knowee AI · Accepted Answer

I'm sorry, but you didn't provide the answer in 1.2.1. However, I can explain the two key features of long-run equilibrium in general and how to determine the price.

1. Zero Economic Profit: In the long run, firms will enter or exit the market until they are making zero economic profit. This means that all firms are earning just enough revenue to cover their costs, including a normal level of profit (the minimum level of profit necessary to keep firms in the market).

2. Productive Efficiency: Firms in long-run equilibrium are productively efficient. This means they produce at the lowest point on their long-run average cost curve. In other words, they cannot produce their current output level more cheaply.

To determine the price in the long-run equilibrium, you need to know where the market demand and supply curves intersect. The price at this intersection is the equilibrium price. In the long run, the supply curve is perfectly elastic (horizontal) at the minimum point of the average cost curve, so the long-run equilibrium price is equal to the minimum average cost.

Based on your answer in 1.2.1, identify two key features of long run equilibriumand determine the price associated with this period

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