A competitive price-taker firm's marginal cost curve is regarded as its supply curve because
A) the position of the marginal cost curve determines the price for which the firm should sell its product.
B) among the various cost curves, the marginal cost curve is the only one that slopes upward.
C) the marginal cost curve determines the quantity of output the firm is willing to supply at alternative prices.
D) the firm is aware that marginal revenue must exceed marginal cost in order for profit to be maximized.

Question

Quizplus · Accepted Answer

The marginal cost curve determines the quantity of output the firm is willing to supply at alternative prices because, in a competitive market, firms will produce up to the point where price equals marginal cost.

A Competitive Price-Taker Firm's Marginal Cost Curve Is Regarded as Its