Paper 2 · perfect competition / supply curve
The short-run supply curve of a perfectly competitive firm is the
Aentire marginal cost curve.
Bentire short-run average cost curve.
Cshort-run average cost curve above the minimum marginal cost.
Dmarginal cost curve above the short-run average cost curve.
Explanation: A perfectly competitive firm will supply only when price covers average variable cost. The supply curve is the MC curve above the minimum of the AVC (which coincides with the shut-down point), i.e. the MC curve above the short-run average variable cost curve. The marking scheme states: the MC curve above the short-run average cost curve.
ZIMSEC Economics Paper 2, June 2009, Q5
