The ________ part of a perfectly competitive firm's marginal cost curve that is equal to or above points on its average variable cost curve is the firm's short-run supply curve.
A) declining
B) horizontal
C) rising
D) backward bending

Question

Quizplus · Accepted Answer

The rising part of a perfectly competitive firm's marginal cost curve that is above its average variable cost curve represents the firm's short-run supply curve. This is because, in the short run, a firm will only supply output if the price covers at least the average variable costs, and it will increase supply as the price rises, which corresponds to the upward-sloping portion of the marginal cost curve.

The ________ Part of a Perfectly Competitive Firm's Marginal Cost