A firm's short-run supply curve under perfect competition is ___________.

the rising part of the SMC curve from and above the minimum AVC

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zero output for all prices strictly less than the minimum AVC

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both A and B

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none of the above

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Solution

The correct option is C both A and B
A firm’s short run supply curve is the rising part of the SMC curve from and above the minimum AVC together with zero output for all prices strictly less than the minimum AVC. It can be derived by considering 2 cases- price >= minimum AVC and price < minimum AVC.

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