The firm's supply curve is made up of the

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The supply curve represents the minimum price at which a firm is willing to produce and sell a certain quantity of output. Therefore, it is only profitable for a firm to supply a good if the price is above the minimum of average variable cost (AVC), which is the cost that the firm incurs to produce a unit of output in the short run. Hence, the points on the supply curve where MC=MR above the minimum of AVC represent the quantity of output the firm is willing to produce and sell at different prices, taking into account their marginal costs and revenue. Therefore, option D is the best choice as it implies that the firm is making a profit or at least covering its costs in the long run.

The Firm's Supply Curve Is Made Up of the