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-(Table: Total Cost and Output)Use Table: Total Cost and Output,which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm.Where does Sergei's short-run supply curve begin (assuming he can only produce whole quantities of output)?

Question

Use the following to answer question: 
-(Table: Total Cost and Output)Use Table: Total Cost and Output,which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm.Where does Sergei's short-run supply curve begin (assuming he can only produce whole quantities of output)?

Quizplus · Accepted Answer

Sergei's short-run supply curve begins at the point where his marginal cost (MC) equals his minimum average variable cost (AVC) because he must at least cover his variable costs to stay in business. In this case, the point where MC intersects AVC is at Q = 3, which corresponds to a price of $33.33 (as shown in the table). Therefore, choice C is the correct answer. Choices A, B, and D are incorrect because they do not correspond to the point where MC intersects AVC.

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