In the short run,the individual competitive firm's supply curve is that segment of the:

A) average variable cost curve lying below the marginal cost curve.
B) marginal cost curve lying above the average variable cost curve.
C) marginal revenue curve lying below the demand curve.
D) marginal cost curve lying between the average total cost and average variable cost curves.

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Katie Stetson · Accepted Answer

Final Answer : B, Explanation :  In the short run, a competitive firm will only produce if the price is above its average variable cost. Therefore, the short run supply curve of the firm is the portion of the marginal cost curve that lies above the average variable cost curve. This is because if the price is below the average variable cost, the firm would shut down in the short run, and its supply would be zero.

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