Answer
A competitive firm's price should equal its marginal cost in both the short and long run.
Work Step by Step
A competitive firm's price will be equal to its marginal revenue (MR). When firms engage in profit-maximizing behavior, they adjust their output such that marginal revenue is equal to marginal cost (MC). When MR > MC, the firm will increase output. Once MC < MR, the firm will reduce its output.
In a competitive market, this MR = MC rule holds true regardless of time. Thus, in both the short and long runs, competitive firms will keep marginal cost (MC) equal to marginal revenue and, subsequently, price.
