A perfectly competitive firm's supply curve is its
A)marginal cost curve.
B)marginal cost curve above its minimum average total cost.
C)marginal cost curve above its minimum average variable cost.
D)marginal cost curve above its minimum average fixed cost.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm's supply curve is the portion of its marginal cost curve that lies above the minimum point of its average variable cost curve. This is because the firm will only produce if the price is above the average variable cost to cover its variable costs in the short run.

A Perfectly Competitive Firm's Supply Curve Is Its