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For the equilibrium of the firm and the industry in the short period in a competitive market, the condition is:

A. P = AC

B. P = MC

C. AC = MC

D. MC = TR

Correct Answer : B.


Equilibrium condition in shortrun in perfect competition will prevail at a point where profit is maximized. This happens where price is equal to marginal cost (P=MC) .Also at the point of equilibrium, the marginal cost curve must be upward sloping.}

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