The individual firm's short-run supply curve is the part of its:

Question

Quizplus · Accepted Answer

In the short run, a firm's supply curve is determined by its marginal cost curve because it is assumed that all fixed costs are already sunk and cannot be changed in the short run. The portion of the marginal cost curve that lies above the average variable cost curve represents the additional variable costs a firm must incur to produce an additional unit of output. Therefore, the correct answer is C. The other options are incorrect because they do not accurately represent how a firm's supply curve is determined in the short run.

The Individual Firm's Short-Run Supply Curve Is the Part of Its