Use the following scenario to answer the following questions:
Lenora and Uma own a dog-grooming business in upstate New York,called Pawkeepsie Groomers.There are many buyers and many sellers in the dog-grooming service market.Pawkeepsie Groomers experiences normal cost curves,with the marginal cost (MC)curve crossing average variable cost (AVC)at $14 and average total cost (ATC)at $22.
-Pawkeepsie Groomers' short-run supply curve would be the
A) marginal revenue (MR)curve above $14.
B) marginal revenue (MR)curve above $22.
C) marginal cost (MC)curve above $14.
D) marginal cost (MC)curve above $22.
E) average variable cost (AVC)curve above $14.

Question

Quizplus · Accepted Answer

In the short run, the supply curve for a firm with normal cost curves is equal to the marginal cost curve above the minimum point on the average variable cost curve. In this scenario, the MC curve crosses the AVC curve at $14, so the short-run supply curve would be the MC curve above $14. Thus, the correct answer is choice C.

Use the Following Scenario to Answer the Following Questions