Final answer:
Firms are operating at an efficient scale in the long-run equilibrium of a market with free entry and exit, as the price equals the average total cost at the zero-profit point. The correct answer is option d.
Step-by-step explanation:
In the long-run equilibrium of a market with free entry and exit, the correct answer is that firms are operating at an efficient scale. This is because, in a perfectly competitive market, the process of entry and exit will drive the price to the zero-profit point, which occurs where the marginal cost curve crosses the average cost curve at its minimum. At this point, firms are making zero economic profit, meaning that the price of the good equals the average total cost. Therefore, firms cannot be operating at a position where marginal cost exceeds average total cost, nor where the price of the good exceeds the average total cost, nor at a point where the average total cost exceeds the price of the good. Instead, firms are producing goods at the lowest possible average cost, which is the definition of operating at an efficient scale.