its marginal cost equals average cost
it earns supernormal profits
its price equals marginal costCorrect
its average cost is minimum

Explanation
The cost of using scarce factor resources to produce one more unit of output is the marginal cost; and the price paid by consumers reflects the value placed on the final good. In long-run equilibrium, the firm charges a price that is equal to the marginal cost. This means that the firm is allocatively