The long-run supply curve of a perfectly competitive firm is the marginal cost curve above the minimum point on the average variable cost curve.

Question

Quizplus · Accepted Answer

The long-run supply curve of a perfectly competitive firm is actually the portion of the marginal cost curve that lies above the average total cost curve, not just above the average variable cost curve. This is because, in the long run, firms need to cover all their costs, including fixed costs, to remain in the market.

The Long-Run Supply Curve of a Perfectly Competitive Firm Is