From the following which is incorrect with respect to firm's profit maximization in long run?

1. Price = Long Run Marginal Cost
2. LRMC is first decreasing and then increasing
3. Price = Short Run Marginal Cost
4. Price ≥ Long Run Average Variable Cost

Option 1 -> In long-run equilibrium, a perfectly competitive firm sets Price = LRMC for profit maximization. This is correct.

Option 2 -> The LRMC curve is typically U-shaped, first decreasing due to economies of scale, then increasing due to diseconomies of scale. This is correct.

Option 3 -> This refers to short-run profit maximization condition, not long-run. In the long run, the firm adjusts all inputs and the relevant condition is P = LRMC, not P = SRMC. This is incorrect for long-run analysis.

Option 4 -> In the long run, all costs are variable, so LRAVC essentially equals LRAC. The condition P ≥ LRAC must hold for long-run operation. This is correct.

Hence, Option 3: Price = Short Run Marginal Cost -> The question specifically asks about long-run profit maximization. While P = SRMC is valid for short-run equilibrium, it is not the appropriate condition for long-run analysis. In the long run, firms can adjust all inputs including plant size, so the correct profit maximization condition is P = LRMC (Long Run Marginal Cost), not P = SRMC. This makes Option 3 incorrect in the context of long-run profit maximization. -> correct