In a perfectly competitive market, long-run equilibrium is characterized by which of the following?
1
Firms produce at a level where marginal cost is greater than marginal revenue, ensuring allocative efficiency.
2
Firms operate at the minimum of their short-run average cost curve, but not necessarily at the minimum of their long-run average cost curve.
3
Firms earn normal profits, and both allocative and productive efficiencies are achieved.
4
There is deadweight loss in the market as firms restrict output to increase profits.