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Question
What is the supply curve of a firm in the long run?
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Solution
The rising segment of the firm's MC curve (Starting from the break-even point, when price= average cost) represents the firm's supply curve in the long run.
The long-run is a period in which supply can be changed by changing all the factors of production.
There is no distinction between fixed and variable factors. In the long run, the firm produces only at minimum average cost.
The long-run is a period in which supply can be changed by changing all the factors of production.
There is no distinction between fixed and variable factors. In the long run, the firm produces only at minimum average cost.
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