Which of the following statements about supply curves is correct? I. A supply curve also can be a marginal cost curve.
II) A supply curve tells the quantity of other goods and services that sellers must give up to produce another unit of the good.
A) I only
B) II only
C) both I and II
D) neither I nor II

Question

Quizplus · Accepted Answer

A supply curve shows the relationship between the price of a good and the quantity supplied. A marginal cost curve shows the change in total cost that results from producing one additional unit of output. In the short run, a firm's supply curve is typically upward sloping, reflecting the law of diminishing returns. In the long run, a firm's supply curve is typically horizontal, reflecting the fact that the firm can enter or exit the market in the long run.

Which of the Following Statements About Supply Curves Is Correct