FIGURE 11 LONG-RUN EQUILIBRIUM FOR THE PERFECTLY COMPETITIVE FIRM
Market price in the long run is PLR, corresponding to the minimum point on the SRATC and LRATC curves. At point e, P = MR = MC = SRATCmin = LRATCmin. This is why economists use perfectly competitive markets as the benchmark when comparing the performance of other market structures. With competition, consumers get just what they want because price reflects their desires, and they get these products at the lowest possible price (LRATCmin). Further, as panel A illustrates, the sum of consumer and producer surplus is maximized. Any reduction in output reduces the sum of consumer and producer surplus.