Based on the cost of production hypothesis, after all, long-run adjustments are completed in a perfectly competitive market, the output will occur at each firm's minimum "average total cost where product price is equal to marginal revenue."
This is because the point at which the product price equals the Marginal Revenue is where additional revenue from selling an extra unit equals marginal revenue.
However, when marginal revenue surpasses marginal cost, the is considered to be a profit from commodity sold. These profits are sometimes referred Marginal benefits.
Also, when marginal revenue goes below the marginal cost, this is considered to be a loss.
Hence, in this case, it is concluded that the correct answer is "average total cost where product price is equal to marginal revenue."
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