Figure 7-7 Figure 7-7 shows cost and demand curves facing a profit-maximising, perfectly competitive firm.
-Refer to Figure 7-7.Identify the firm's short-run supply curve.
A) the marginal cost curve
B) the marginal cost curve from a and above
C) the marginal cost curve from b and above
D) the marginal cost curve from d and above

Question

Figure 7-7  Figure 7-7 shows cost and demand curves facing a profit-maximising, perfectly competitive firm.
-Refer to Figure 7-7.Identify the firm's short-run supply curve.
A) the marginal cost curve 
B) the marginal cost curve from a and above 
C) the marginal cost curve from b and above 
D) the marginal cost curve from d and above

Quizplus · Accepted Answer

In the short run, a firm's supply curve is the portion of its marginal cost curve that lies above the average variable cost curve. Point "b" typically represents the shutdown point where the price equals the minimum average variable cost.

Figure 7-7 Figure 7-7 Shows Cost and Demand Curves