Suppose a firm operating in a competitive market has the fol

Suppose a firm operating in a competitive market has the following cost curves MC ATC AvC A. Caurtity 26. Refer to the accompanying figure above. Which line segment best reflects the short-run supply curve for this firm? a. ABCF b. CD c. DF d. BCD

Solution

Ans

CD is right option because under perfect competition firm will not supply anything below the point where price lies below Avc.