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Asked by Arika DeCara on Jul 07, 2024

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The short-run supply curve of a purely competitive producer is based primarily on its:

A) AVC curve.
B) ATC curve.
C) AFC curve.
D) MC curve.

Short-Run Supply

The supply of goods or services that businesses can produce or provide with their current resources and capacities in a short time frame.

Purely Competitive

A market structure characterized by many sellers offering identical products or services, leading to a scenario where no single seller can influence market price.

AVC Curve

The graphical representation of the Average Variable Cost of production as it relates to output levels.

  • Identify the short-term supply curve specific to a producer in perfect competition and its influencing factors.
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Verified Answer

JB
Jean Baptiste FamilyJul 11, 2024
Final Answer :
D
Explanation :
Short-run supply decisions are based on the MC curve, as the producer will continue to produce as long as marginal revenue (MR) is greater than or equal to marginal cost (MC). Once MR is no longer greater than or equal to MC, the producer will stop producing. The AVC, ATC, and AFC curves can affect long-run supply decisions, but they are not as relevant for short-run decisions.

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