<p>According to the textbooks,in a long run equilibrium, the market price will be equal to the minimum point of firm's ATC curve. But every firm's ATC curve will differ i.e each one of them will have different cost structure. In such scenario, how do we identify the representative firm?</p>

CC BY-SA 3.0
2017-06-08T13:20:15.017Z
There is variable on the costs structure, market segmentation, price segmentations, product segmentations, etc.
mootmoot
CC BY-SA 3.0
2017-06-08T17:31:58.373Z
In a perfectly competitive market, firms will act as price takers and at equilibrium  there will be only one price. Further, the product will be homogeneous in a perfectly competitive market. I can only imagine of one situation where every firm's ATC curve in long run equilibrium will exactly be the same. Is that correct?
P. Singh
CC BY-SA 3.0
2017-06-09T08:16:05.407Z
What you describe is NOT "perfectly competitive market", it is a context. You can choose market capital,  profits margin, etc. The problem of "perfect" ATC is difficult to apply to the real-world scenario, as technology breakthrough, sometimes it can mean a total product phase out.
mootmoot
<microeconomics><long-run>
Firms Entry/Exit Due to Economic Profit in a Perfectly Competitive Market
P. Singh
# Firms Entry/Exit Due to Economic Profit in a Perfectly Competitive Market

(Asked by: username_0 on 2017-06-07)

According to the textbooks,in a long run equilibrium, the market price will be equal to the minimum point of firm's ATC curve. But every firm's ATC curve will differ i.e each one of them will have different cost structure. In such scenario, how do we identify the representative firm?

**Tags:** microeconomics, long-run
> **Comments:**
> **username_1**: There is variable on the costs structure, market segmentation, price segmentations, product segmentations, etc.  
> **username_0**: In a perfectly competitive market, firms will act as price takers and at equilibrium  there will be only one price. Further, the product will be homogeneous in a perfectly competitive market. I can only imagine of one situation where every firm's ATC curve in long run equilibrium will exactly be the same. Is that correct?  
> **username_1**: What you describe is NOT "perfectly competitive market", it is a context. You can choose market capital,  profits margin, etc. The problem of "perfect" ATC is difficult to apply to the real-world scenario, as technology breakthrough, sometimes it can mean a total product phase out.  

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## 0 answers

