Question

When in a purely competitive industry is in long run equilibrium, what equality is true? What kind of efficiency (or efficiencies) is achieved in long run equilibrium and what equality represents the efficiency (or efficiencies)?  

Answer 1

In a purely competitive industry in the long run, price, marginal cost, marginal revenue and average total cost all are equal. This leads to market being economic efficient, i.e. the market is both allocative and productive efficient.

A market achieves allocative efficiency when the value of the goods produced in the market is equal to the value what the consumer assign to that good, here, the price and marginal cost are both equal. A firm achieves productive efficiency when they are producing at the lowest point of the ATC, this means there is no wastage in the economy.