A perfectly competitive firm's short-run supply curve is

		upward sloping and is the portion of the marginal cost curve that lies above the average total cost curve.
		upward sloping and is the portion of the marginal cost curve that lies above the average variable cost curve.
		perfectly elastic at the market price.
		horizontal at the minimum average total cost.

Expert Solution

upward sloping and is the portion of the marginal cost curve that lies above the average variable cost curve.

A perfectly competitive firm's short-run supply curve is upward sloping and is the portion of the marginal cost curve that lies above the average variable cost curve.

because the marginal cost shows the minimum willingness to accept at the production but the production starts if the MC is above min(AVC) because of the loss minimization.

Rahul Sunny answered 2 years ago

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