In perfect competition, short-run equilibrium occurs when:
1
Firms can adjust all input levels and operate at the minimum average total cost.
2
Firms produce where marginal cost equals price, but may still earn supernormal profits or incur losses.
3
Firms face downward-sloping demand curves, allowing for price-setting behavior.
4
Firms restrict output to maximize profits above their average total cost.
5
Question Not Attempted