The supply curve of the perfectly competitive firm in the short run is equal to:

Question

The supply curve of the perfectly competitive firm in the short run is equal to: A. The ATC curve above minimum AVC B. The marginal cost curve above minimum AVC C. The AVC curve above minimum AVC D. None of the above The supply curve of the perfectly competitive firm in the short run is equal to: A. The ATC curve above minimum AVC B. The marginal cost curve above minimum AVC C. The AVC curve above minimum AVC D. None of the above A. The ATC curve above minimum AVC B. The marginal cost curve above minimum AVC C. The AVC curve above minimum AVC D. None of the above

Explanation / Answer

Answer ) B. The marginal cost curve above minimum AVC.

for a perfectly competitive price taker the marginal cost curve is a supply curve only because a perfectly competitive firm equates price with marginal cost. This happens only because price is equal to marginal revenue for a perfectly competitive firm.

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