Above the Shutdown Point, a Competitive Firm's Supply Curve Coincides

question 126

Multiple Choice

Above the shutdown point, a competitive firm's supply curve coincides with its:

• A) marginal revenue curve.
• B) ​marginal cost curve.
• C) ​average variable cost curve.
• D) ​average total cost curve.

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Definitions:

Law of Diminishing Marginal Utility

An economic principle that states the additional satisfaction a consumer gets from purchasing one more unit of a product will lessen with each additional unit purchased.

Marginal Utility

The additional satisfaction or utility that a consumer derives from consuming one more unit of a good or service.

Total Utility

The total satisfaction or benefit a consumer receives from consuming a specific quantity of goods or services.

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.