Asked by raman rainkh on Jun 23, 2024
Verified
The firm's short-run supply curve runs up the marginal cost curve
A) to the shutdown point.
B) from the shutdown point all the way up the curve.
C) to the break-even point.
D) from the break-even point all the way up the curve.
Short-run Supply Curve
The short-run supply curve illustrates how the quantity of goods supplied by producers changes in response to a change in price over a short period, factoring in some fixed production costs.
Marginal Cost Curve
A graphical representation showing how the cost of producing one additional unit of a good or service changes as production volume varies.
Shutdown Point
The level of output and price where a firm's total revenue exactly covers its variable costs, below which the firm will cease production in the short run.
- Examine the dissimilarities and correlations between short-term and long-term strategic planning for firms.
Verified Answer
AK
Ayush KumarJun 30, 2024
Final Answer :
B
Explanation :
In the short run, a firm's supply curve is represented by its marginal cost curve starting from the shutdown point upwards. The shutdown point is where price equals the minimum average variable cost. Below this point, the firm would shut down operations because it cannot cover its variable costs.
Learning Objectives
- Examine the dissimilarities and correlations between short-term and long-term strategic planning for firms.