The perfectly competitive firm's long-run supply curve is
A) the same as the industry's supply curve
B) the average total cost curve
C) perfectly horizontal
D) the marginal cost curve above the ATC
E) the marginal cost curve above the AVC

Question

Quizplus · Accepted Answer

In the long run, a perfectly competitive firm will adjust its scale of operation until it operates at the minimum point of its average total cost curve. The firm's long-run supply curve is its marginal cost curve above the average total cost curve, as it will not supply at prices below its average total costs, ensuring it covers all its costs and earns normal profit.

The Perfectly Competitive Firm's Long-Run Supply Curve Is