Exhibit 7-13 Price and cost per unit curves

In Exhibit 7-13, the firm's short-run supply curve is the marginal cost curve above point

Question

Exhibit 7-13 Price and cost per unit curves

In Exhibit 7-13, the firm's short-run supply curve is the marginal cost curve above point

Quizplus · Accepted Answer

In the short run, the firm's supply curve is the portion of the marginal cost curve that lies above the minimum point of the average variable cost curve. In the given exhibit, point B is the minimum point of the average variable cost curve, and hence the marginal cost curve above point B represents the short-run supply curve. Therefore, the correct answer is B.

Exhibit 7-13 Price and Cost Per Unit Curves