The supply curve of a perfectly competitive firm in the short run is
A)the firm's average variable cost curve.
B)the portion of the firm's marginal cost curve below the minimum point of the average variable cost curve.
C)the portion of the firm's marginal cost curve above the minimum point of the average variable cost curve.
D)the portion of the firm's marginal cost curve above the minimum point of the average total cost curve.

Question

Quizplus · Accepted Answer

In the short run, a perfectly competitive firm's supply curve is the portion of its marginal cost curve that lies above the minimum point of the 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.

The Supply Curve of a Perfectly Competitive Firm in the Short