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Author Question: What is the relationship between a firm's supply curve, its marginal cost curve, and its average ... (Read 81 times)

abarnes

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on: Jun 29, 2018
What is the relationship between a firm's supply curve, its marginal cost curve, and its average variable cost curve?
 
  What will be an ideal response?

Question 2

Refer to Figure 3-4. At a price of 25, how many units will be supplied?
 
  A) 400 B) 500 C) 600 D) 800


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ladyjames123

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The firm will produce output as long as the price is greater than the minimum AVC. It will choose the level of output where MC = P, which means the firm's supply curve is the firm's MC curve above minimum AVC and along the vertical axis, producing zero, below the minimum AVC.

Answer to Question 2

D


abarnes

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Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review

laurnthompson

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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