What is the supply curve for a perfectly competitive firm in the short run? The supply curve for a firm in a perfectly competitive market in the short run is A. that firm's marginal cost curve for prices at or above average variable cost. B. a horizontal line equal to the market price. C. that firm's marginal cost curve for prices at or above average fixed costaverage fixed cost. D. that firm's marginal revenue curve for prices at or above average total costaverage total cost. E. that firm's marginal costcost curve

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Business

Ayla Hines

26 June, 20:00

What is the supply curve for a perfectly competitive firm in the short run? The supply curve for a firm in a perfectly competitive market in the short run is A. that firm's marginal cost curve for prices at or above average variable cost. B. a horizontal line equal to the market price. C. that firm's marginal cost curve for prices at or above average fixed costaverage fixed cost. D. that firm's marginal revenue curve for prices at or above average total costaverage total cost. E. that firm's marginal costcost curve

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Answers (1)

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Yael Mcintosh · Answer 1

A. that firm's marginal cost curve for prices at or above average variable cost.

Explanation:

In the short run, in the perfectly competitive market the supply curve states that average variable cost is more than that of marginal cost.

This is demonstrated by the lines on the graph as the curve of average variable cost is more wide than the curve of marginal cost, this is because the marginal cost decreases with each unit and the average variable cost increases.

Therefore, the correct option explaining the short run supply of perfectly competitive market is:

Statement A.