The short-run supply curve of a purely competitive producer is based primarily on its
A) AVC curve.
B) ATC curve.
C) AFC curve.
D) MC curve.

Question

Quizplus · Accepted Answer

The short-run supply curve of a purely competitive producer is based primarily on its marginal cost (MC) curve. In the short run, a producer will only supply output as long as the price they receive is greater than or equal to their marginal cost. As such, the portion of their MC curve above the minimum point of the average variable cost (AVC) curve represents the producer's short-run supply curve. The other options (A, B, and C) are not as significant in determining the producer's short-run supply decision.

The Short-Run Supply Curve of a Purely Competitive Producer Is