The minimum point of a firm's LRAC is Rs 8, at which it produces a quantity of 500. Which of the following price-quantity pairs (p,q) can lie on the supply curve?

(5,400)

No worries! We‘ve got your back. Try BYJU‘S free classes today!

(10,400)

No worries! We‘ve got your back. Try BYJU‘S free classes today!

(7,600)

No worries! We‘ve got your back. Try BYJU‘S free classes today!

(9,700)

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D
(9,700)

The supply curve is the portion of the MC curve above the LRAC. It starts from the minimum point of the LRAC. Since the supply curve is upward sloping, for any point on the supply curve, the price will be greater than Rs 8 and quantity greater than 500 units. Only option D satisfies this condition.

Suggest Corrections

Similar questions

The minimum quantity that a firm supply is 1000, at a price of Rs 20. The minimum average variable cost is Rs ___ .

At a price of Rs 100, the quantity of a good supplied by a firm is 5000. Which of these can be the quantity supplied when the price is Rs 200, assuming diminishing returns?

Q. The minimum quantity that a firm supplies is 1000, at a price of Rs 20. The minimum average variable cost is Rs .

The market price of a good changes from Rs 5 to Rs 20. As a result, the quantity supplied by a firm increases by 15 units. The price elasticity of the firm’s supply curve is 0.5. Find the final output levels of the firm.

The costs (LRAC) and prices (P) for four firms are given in the options below. Which of these cannot lie on the long-run supply curve of a firm?

Join BYJU'S Learning Program