The short-run supply curve of a perfectly competitive firm is given by

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Quizplus · Accepted Answer

The short-run supply curve of a perfectly competitive firm is indeed the rising portion of the marginal cost (MC) curve that lies above the shutdown point. The shutdown point is where the price covers the average variable costs (AVC), not necessarily the total costs or the average total costs (ATC). This is because, in the short run, if the firm can cover its variable costs, it will continue to operate to contribute to fixed costs.

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