A perfectly competitive firm's short-run supply curve is the part of its marginal cost curve that is:

Question

Quizplus · Accepted Answer

The short-run supply curve of a perfectly competitive firm is the upward sloping part of its marginal cost curve that is above the minimum level of average variable cost. This is because in the short run, a perfectly competitive firm will continue producing as long as the market price is higher than the minimum level of average variable cost, since they are able to cover their variable costs. Once the market price falls below this level, the firm will shut down and produce zero output. Therefore, B is the correct choice as it captures both of these conditions.

A Perfectly Competitive Firm's Short-Run Supply Curve Is the Part