A competitive firm's short run supply curve is its:
A)owner's preference function.
B)SAC curve to the right of its SMC curve.
C)SMC curve above its SAVC curve.
D)SMC curve above its SAC curve.

Question

Quizplus · Accepted Answer

The short run supply curve of a competitive firm is its marginal cost curve (SMC) above the shutdown point, which is determined by the average variable cost curve (SAVC). This is because the firm will not supply any output if the price is below its average variable cost, as it would not cover its variable costs.

A Competitive Firm's Short Run Supply Curve Is Its