The short-run supply curve for an individual firm operating in a perfectly competitive market is:

a. the marginal cost curve at or above the average total cost curve.

b. the marginal cost curve at or above the average variable cost curve.

c. the marginal revenue curve at or above the average total cost curve.

d. the marginal revenue curve at or above the average variable cost curve.

Question

Business

Bentley Molina

26 May, 06:31

The short-run supply curve for an individual firm operating in a perfectly competitive market is:

a. the marginal cost curve at or above the average total cost curve.

b. the marginal cost curve at or above the average variable cost curve.

c. the marginal revenue curve at or above the average total cost curve.

d. the marginal revenue curve at or above the average variable cost curve.

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Answers (1)

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Simeon Cobb · Answer 1

Answer: d. the marginal revenue curve at or above the average variable cost curve

Explanation: short-run supply curve of a firm in a perfectly competitive market describes the relationship between price (P) and quantity supplied (Q). Supply curve in this type of market is a time in which there is an increase in quantity of goods produce by increasing variable factors while fixed factors remain the same.

One major feature of a short run market is that supply of a commodity is kept constant until price becomes greater or equal to average variable cost (AVC), supply is consistent until marginal cost (MC) is equal to average revenue (AVR).