The Short-Run Supply Curve of a Perfectly Competitive Firm

question 143

Multiple Choice

The short-run supply curve of a perfectly competitive firm

• A)intersects the minimum point of its short-run average total cost curve but not its short-run average variable cost curve.
• B)intersects the minimum point of its short-run average variable cost curve but not its short-run average total cost curve.
• C)intersects the minimum point of both its short-run average variable cost and its short-run average total cost curves.
• D)intersects the minimum point of its short-run average total cost curve and may or may not intersect the minimum point of its short-run average variable cost curve.

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Definitions:

Supply Curves

A graphical representation that shows the relationship between the price of a good or service and the quantity that suppliers are willing to offer for sale at that price, over a given period.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace where individuals pursuing their own self-interest lead to the benefit of society at large.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than its competitors.

Self-Interest

The pursuit of personal advantage and well-being, often driving economic decisions and behaviors.