In the short run, the individual competitive firm's supply curve is that segment of the
A)average variable cost curve lying below the marginal cost curve.
B)marginal cost curve lying above the average variable cost curve.
C)marginal revenue curve lying below the demand curve.
D)marginal cost curve lying between the average total cost and average variable cost curves.

Question

Quizplus · Accepted Answer

In the short run, a competitive firm's supply curve is represented by the portion of the marginal cost curve that lies above the average variable cost curve. This is because a firm will only supply output at prices that cover its average variable costs, and the marginal cost curve indicates the additional cost of producing one more unit of output.

In the Short Run, the Individual Competitive Firm's Supply Curve