Short run equilibrium price and output determination under perfect competition:
A) As firm in the perfectly competitive market is a price-taker, it has to adjust its stage of output to maximize its gain. The goal of any producer is to maximize his profit.
B) The short run is a time period in which the number and plant size of the firms are set. In this period, the firm can generate more only by rising the variable inputs.
C) Since the entry of new firms or exit of the present firms is not possible in short-run, the firm in perfectly competitive market can either earn super-normal gain or normal gain or acquire loss in short period.
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