In a perfectly competitive market choose the correct statement from the following.

(A) Equilibrium occurs where market demand equals market supply.
(B) Each firm employs labour upto the point where the marginal revenue of labour equals the wage rate.
(C) Equilibrium price and quantity are determined when there is large number of firms.
(D) Equilibrium price is always equal to minimum average cost of the firms.

Choose the correct answer from the options given below:

(A), (B) and (D) only

The correct answer is Option (1) → (A), (B) and (D) only

(A) Equilibrium occurs where market demand equals market supply. Correct. This is the fundamental definition of market equilibrium in any competitive market, including perfect competition. The intersection of the overall market demand curve and market supply curve determines the equilibrium price and quantity for the entire industry.

(B) Each firm employs labour up to the point where the marginal revenue of labour equals the wage rate – Correct. Firms maximize profit by employing labour until Marginal Revenue Product (MRP) of labour equals the wage rate. In perfect competition, MRP = Marginal Product × Price, and firms hire labour up to this equality.

(C) Equilibrium price and quantity are determined when there is large number of firms – Incorrect. While a large number of firms is a feature of perfect competition, it is not the reason why equilibrium price and quantity are determined.
Price and quantity are determined by the intersection of market demand and supply, regardless of the number of firms. So this statement is not entirely accurate as a reason for equilibrium.

(D) Equilibrium price is always equal to minimum average cost of the firms. Correct. This is strictly true only for long-run equilibrium in perfect competition due to free entry and exit, which drives economic profits to zero and forces firms to produce at the minimum point of their Average Total Cost (ATC) curve. [Note: The use of "always" makes it tricky, as it's not true in the short run]. However, it is a defining long-run characteristic of perfect competition.

Note: the answer is as per NTA.