Question

the firm supply curve equals its MC curve? true or false?

Answer 1

Ans :- true

reason the MC curve becomes the firm’s supply curve, but only at and above a certain point. So the supply curve is equal to the MC curve from the shutdown point upward. That’s because below this point, the firm would not produce anything. So it’s only a portion of the firm’s MC curve not the entire curve that will become the supply curve.

In the short run, the firm’s supply curve is its MC curve above AVC (at B). Below this point it will shut down. Hence the firm would be willing to supply at P, but not at P1.

Costs & Revenue MC ATC AVC A B P P1 Q1 Q Output