The short-run supply curve for a perfectly competitive firm is its A. marginal cost curve above...

The short-run supply curve for a perfectly competitive firm is its

A. marginal cost curve above the average variable cost curve.

B. marginal cost curve above the average fixed cost curve.

C. average variable cost curve above the marginal cost curve.

D. average variable cost curve above the average total cost curve.

E. average variable cost curve above the average fixed cost curve.

Expert Solution

A) Marginal cost curve above the average variable cost curve. The marginal cost curve above the minimum level of average variable cost is the supply curve. The minimum of AVC is the shutdown price in a competitive firm and the production will take place on a price above that level.

Rahul Sunny answered 2 years ago

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