The lowest point on a purely competitive firm's short-run supply curve corresponds to
A)the minimum point on its ATC curve.
B)the minimum point on its AVC curve.
C)the minimum point on its AFC curve.
D)the minimum point on its MC curve.

Question

Quizplus · Accepted Answer

The lowest point on a purely competitive firm's short-run supply curve corresponds to the minimum point on its average variable cost (AVC) curve. This is because a firm will not produce if the price falls below its AVC, as it would not be able to cover its variable costs.

The Lowest Point on a Purely Competitive Firm's Short-Run Supply