The Short-Run Supply Curve for a Competitive Industry Is Derived

question 24

Multiple Choice

The short-run supply curve for a competitive industry is derived by summing the _____ for each firm in the industry.

• A)portion of the marginal cost curves above average variable cost
• B)upward sloping portion of the average variable cost curve
• C)downward sloping portions of the marginal cost curve
• D)upward sloping portion of the average total cost curve

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Definitions:

Common Fixed Costs

Expenses that do not change with the volume of production or sales and are shared among multiple products or services within a company.

Noncontrollable Fixed Costs

Costs that cannot be altered or influenced by the decisions of management in the short term.

Controllable Margin

The portion of income that can be directly controlled or influenced by managerial decisions, excluding fixed costs.

Operating Assets

Assets used by a company in its day-to-day operations to generate income, including cash, inventory, buildings, and equipment.