Refer to the graph below. When the industry is in long-run competitive equilibrium the ______

I. price of the product will be $6.
II. firm will produce 100 units of output.
III. firm will earn economic profits of $300 per day.
IV. marginal cost of production will be $3.

Correct Answer: II only

In a long-run competitive equilibrium, the zero profit condition must hold, so price must equal both marginal cost and long-run average total cost. This is only true at a price of $4, so output must equal 100 units.