(I) A firm's short-run supply curve is equal to its average variable cost curve above marginal revenue. (II) The short-run supply curve for a price-taker market is the horizontal sum of the supply curves of all firms in the industry.
A) I is true; II is false.
B) I is false; II is true.
C) Both I and II are true.
D) Both I and II are false.

Question

Quizplus · Accepted Answer

In the short run, a firm's supply curve is its marginal cost curve above the average variable cost, not the average variable cost curve itself. The short-run supply curve for a price-taker market is indeed the horizontal sum of the supply curves of all firms in the industry.

(I) a Firm's Short-Run Supply Curve Is Equal to Its