So long as P AVC the competitive firms shortrun supply curve

So long as P AVC, the competitive firm\'s short-run supply curve is equal to: AVC MC P none of these. At the profit maximizing level of output for a monopolist: Holding supply constant, the cost of regulation fall wholly on producers when:

Solution

Q19 A firm, in short-run, remains in operation as long as P is greater than AVC. If price falls below AVC then firm shuts down.

In case of perfect competition, price equals marginal cost.

So, in case of perfectly competitive firm, a firm will remain in operation in short run as long as MC is greater than AVC. This means it will supply output as long as MC is greater than AVC and due to this reason MC curve lying above the AVC curve constitutes the short-run supply curve of the perfectly competitive firm.

Thus, so long as P > AVC, the competitive firm\'s short-run supply curve is equal to MC.

Hence, the correct answer is option (b).