Which of these curves is the competitive firm's short-run supply curve?

Question

Quizplus · Accepted Answer

The marginal cost curve above average variable cost represents the competitive firm's short-run supply curve. This is because in the short run, a firm will produce as long as the price exceeds the marginal cost of production, which is represented by the portion of the marginal cost curve above the average variable cost curve. Once the price falls below the average variable cost, the firm will shut down and produce nothing. Hence, the portion of the marginal cost curve above the average variable cost curve represents the firm's short-run supply curve.

Which of These Curves Is the Competitive Firm's Short-Run Supply