In long-run competitive equilibrium, P 5 MC 5 SRATC 5 LRATC. Because P 5 MR, we can write the condition as P 5 MR 5 MC 5 SRATC 5 LRATC. The condition thus consists of four parts:

(a) P 5 MR,

(b) MR 5 MC,

(c) P 5 SRATC, and

(d) SRATC 5 LRATC. Part (b)—MR 5 MC—exists because the perfectly competitive firm attempts to maximize profits, and this is how it does it. What are the explanations for parts (a), (c), and (d)?