The Short-Run Supply Curve of a Perfectly Competitive Firm Is

question 146

Multiple Choice

The short-run supply curve of a perfectly competitive firm is the

• A)upward-sloping portion of its average total cost curve
• B)upward-sloping portion of its average variable cost curve
• C)average fixed cost curve at all levels of output
• D)marginal cost curve, which lies above the average variable cost curve
• E)downward-sloping portion of its marginal cost curve

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Definitions:

Hedging

A strategy used to offset potential losses or gains that may be incurred by a companion investment.

Economic Exposure

The risk that a company's cash flow, foreign investments, or earnings may suffer as a result of fluctuating exchange rates.

Derivative Security

A financial instrument whose value is based on the value of an underlying asset, such as stocks, bonds, commodities, or market indexes.

American Put Option

A put option that gives the holder the right to sell an asset at a specified price anytime before the expiration date.