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LONG-RUN EQUILIBRIUM CONDITIONS: The long-run equilibrium of perfectly competitive industry generates six specific equilibrium conditions, including (1) economic efficiency (P = MC), (2) profit maximization (MR = MC), (3) perfect competition (MR = AR = P), (4) breakeven output (P = AR = ATC), (5) minimum production cost (MC = ATC), and (6) minimum efficient scale (MC = ATC = LRAC = LRMC).
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PLANNING HORIZON Another term for the long-run average cost curve. The long-run average cost curve is termed the planning horizon or planning curve because it provides information that a firm can use to plan factory construction and expansion in the long run.
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Francis Bacon (1561-1626), a champion of the scientific method, died when he caught a severe cold while attempting to preserve a chicken by filling it with snow.
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"If you don't make mistakes, you aren't really trying." -- Coleman Hawkings,musician
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ACBS
Accrediting Commission for Business Schools
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