Explain how the short-run supply curve of the competitive firm is derived
Since the firm is either minimizing losses or maximizing profit in the short run if it produces where MC = P above minimum AVC for any price above minimum AVC, the quantity can simply be read off the MC curve. Thus the MC curve above minimum AVC becomes the firm's short-run supply curve.
You might also like to view...
Other things being equal, an increase in consumption spending implies
A) a decline in saving. B) that economic growth will soon increase. C) a higher standard of living in the future. D) a decline in government spending.
Consider a closed economy without the government. If the savings rate in the economy is 20% and the aggregate savings is $10,000, the aggregate consumption in the economy is:
A) $37,000. B) $45,000. C) $10,000. D) $50,000.
Most consumers in stores use marginal analysis to make their buying decisions.
Answer the following statement true (T) or false (F)
For the fall semester, you had to pay a nonrefundable fee of $600 for your meal plan, which gives you up to 150 meals. If you eat 100 meals, your average cost for a meal is:
A. $0.25. B. $4. C. $5. D. $6.