The Short- Run Supply Curve for a Perfectly Competitive Firm

question 115

Multiple Choice

The short- run supply curve for a perfectly competitive firm is

• A) its entire marginal- cost curve.
• B) its marginal- cost curve above the average- variable- cost curve.
• C) the industry supply curve.
• D) its average- revenue curve.
• E) its rising portion of the average- variable- cost curve.

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Definitions:

Capital Expenditure

Funds spent by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Working Capital Management

Planning and managing the firm’s current assets and liabilities.

Inventory

Raw materials, work-in-progress, and finished goods that are considered assets and intended for sale in the ordinary course of business.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity that it uses to finance its overall operations and growth.