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- Subject
- Costs , Supply And Perfect Competitioneconomics-mcqs › costs-supply-and-perfect-competition
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
Explanation
For a competitive firm, the short-run supply curve corresponds to the portion of the short-run marginal cost (SMC) curve that lies above the short-run average variable cost (SAVC). Similarly, the long-run supply curve is represented by the segment of the long-run marginal cost (LMC) curve that is above the long-run average cost (LAC). This is because the firm will only supply output when price covers variable costs in the short run and average costs in the long run.
More Costs , Supply And Perfect Competition MCQs
Practice related questions from the same subject.
- 1.Under what condition will a firm cease production and produce nothing in the short term?
- 2.In the short run, the average total cost is composed of which two components?
- 3.What is the relationship between marginal cost and average cost when the average cost is decreasing and when it is increasing?
- 4.What does it indicate when the long-run average cost curve slopes downward from left to right?
- 5.Which characteristic best describes a monopoly market structure?
- 6.According to Porter's Five Forces framework, what is the likely impact on supplier power when a company acquires one of its competitors?
- 7.In a monopolistic competition market, when firms earn abnormal profits, what is the expected effect on marginal cost as new firms enter the industry?
- 8.Identify the option that is not included in the traditional four Ps of marketing.
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