Asked by Garrett Wynne on Apr 28, 2024
Verified
The short-run supply curve of a competitive firm is the portion of
A) the average variable cost curve that lies above its marginal cost curve.
B) its marginal cost curve that lies above its average variable cost curve.
C) its marginal cost curve that lies above its average total cost curve.
D) its average total cost curve that lies above its marginal cost curve.
Short-Run Supply Curve
A graphical representation showing the relationship between the market price of a product and the amount of it that producers are willing to supply in the short term.
Marginal Cost Curve
A graph showing how the cost of producing one more unit of a good varies as the quantity of production increases.
- Comprehend the immediate supply curve of a firm in a competitive market.
Verified Answer
NS
Nicholas SaucedoMay 04, 2024
Final Answer :
B
Explanation :
The short-run supply curve of a competitive firm is the portion of its marginal cost curve that lies above its average variable cost curve. This is because a firm will only supply output in the short run if the price covers its average variable costs, even if it does not cover average total costs.
Learning Objectives
- Comprehend the immediate supply curve of a firm in a competitive market.
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