A purely competitive firm's short-run supply curve is

A) perfectly elastic at the minimum average total cost.
B) upsloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve.
C) upsloping and equal to the portion of the marginal cost curve that lies above the average total cost curve.
D) upsloping only when the industry has constant costs.

Question

Dylan Legend123 · Accepted Answer

Final Answer : B, Explanation :  A purely competitive firm's short-run supply curve is upsloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve. This is because the firm will only supply output at a price that covers its average variable costs in the short run.

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