The rising part of a perfectly competitive firm's marginal cost curve that is equal to or above points on its average variable cost curve is the firm's
A) normal profit curve.
B) economic profit curve.
C) short run supply curve.
D) long run supply curve.

Question

Quizplus · Accepted Answer

The rising part of a perfectly competitive firm's marginal cost curve that is equal to or above its average variable cost curve serves as the firm's short run supply curve. This is because in the short run, a firm will supply output up to the point where price equals marginal cost, as long as the price covers the average variable cost.

The Rising Part of a Perfectly Competitive Firm's Marginal Cost