The short-run supply curve for a perfectly competitive firm is

Question

Quizplus · Accepted Answer

In the short run, a perfectly competitive firm will produce at the quantity where marginal cost equals marginal revenue. If the marginal cost is below the average variable cost, the firm will continue to produce. Therefore, the short-run supply curve for a perfectly competitive firm is its marginal cost curve above the average variable cost curve. This is because if the market price is above this level, the firm will produce, and if it is below this level, the firm will shut down.

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