The perfectly competitive seller's short-run supply curve is

Question

Quizplus · Accepted Answer

In the short-run, the perfectly competitive seller will produce as long as the price is above the average variable cost of production. This means that the short-run supply curve is the part of the marginal cost curve that is above the average variable cost curve. Therefore, choice (C) is the correct answer. The entire marginal cost curve (choice A) includes portions that are not profitable for the seller to produce at, while the marginal revenue curve (choice B) is not representative of the profit-maximizing output level. And while the part of the marginal cost curve above the average total cost curve (choice D) represents the profit-maximizing output in the long-run, this is not the case in the short-run.

The Perfectly Competitive Seller's Short-Run Supply Curve Is