The marginal cost curve
A)Is not affected by changes in the price of variable inputs.
B)Slopes downward to the right as output increases.
C)Is the long-run supply curve for a competitive firm at prices below the AVC curve.
D)Is the short-run supply curve for a competitive firm at prices above the AVC curve.

Question

Quizplus · Accepted Answer

The marginal cost curve is indeed the short-run supply curve for a competitive firm at prices above the average variable cost (AVC) curve. This is because, in the short run, a firm will supply output up to the point where the price equals its marginal cost, provided that the price covers the average variable cost.

The Marginal Cost Curve