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Because of the price taking nature of the firm in the perfectly competitive market. The supply curve would be the portin of the (Marginal Cost Curve) that disects the (P=Ar=Mr curves). Som from that point up would be the supply curve, to produce below that point would not be beneficial to the establishment.
Up sloping and equal to the portion of the marginal cost curve that lies above the average variable cost.
The demand curve is also perfectly elastic, this too contributes to the fact.
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∙ 11y ago
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Relationship between marginal cost and the supply curve for a purely competitive firm?
Marginal cost curve above the average variable cost curve, is the same as the short run supply curve. In perfect competition, MC=Price. It follows that production will be at that point. Hence the supply curve is the same as that part of the MC curve which is above AVC, where the firm can cover its variable cost....this is better than shutting down.
The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
How is a perfectly competitive firms marginal cost curve related to its supply curve?
a perfectly competitive firms supply curve will be the portion of the marginal cost curve which lies above the average variable cost curve (AVC)..this will be due to the firms unwillingness to supply below the price in which they could cover their variable costs
In a competitive market the equilibrium price and quantity occur where?
When demand curve intersects the supply curve.
What is a demand and supply curve?
A demand and supply curve is used in economic to show that in a competitive market, the price of a product will vary depending on the need of the consumers.
A firm operating in a purely competitive resource market faces a resource supply curve that is?
B. Perfectly elastic This is because it is operating in a perfect competitive market
Relationship between marginal cost and the supply curve for a purely competitive firm?
Marginal cost curve above the average variable cost curve, is the same as the short run supply curve. In perfect competition, MC=Price. It follows that production will be at that point. Hence the supply curve is the same as that part of the MC curve which is above AVC, where the firm can cover its variable cost....this is better than shutting down.
The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
How is a perfectly competitive firms marginal cost curve related to its supply curve?
a perfectly competitive firms supply curve will be the portion of the marginal cost curve which lies above the average variable cost curve (AVC)..this will be due to the firms unwillingness to supply below the price in which they could cover their variable costs
In a competitive market the equilibrium price and quantity occur where?
When demand curve intersects the supply curve.
What is a firm's short run supply curve?
A perfectly competitive firm's supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost curve.
What is a demand and supply curve?
A demand and supply curve is used in economic to show that in a competitive market, the price of a product will vary depending on the need of the consumers.
What is Demand and supply curve?
A demand and supply curve is used in economic to show that in a competitive market, the price of a product will vary depending on the need of the consumers.
Why does the marginal cost curve correspond to the supply curve?
A perfectly competitive firm's supply curve is that portion of its' marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes profit by producing the quantity of output that equates price and marginal cost. As such, the firm moves along it's marginal cost curve in response to alternative prices. Because the marginal cost curve is positively sloped due to the law of diminishing marginal returns, the firm's supply curve is also positively sloped.
What is difference between individual supply curve and market supply curve?
The difference between individual supply curve and the market supply curve is tat individual supply curve is like a firm. To be able to get the market supply curve you have to have the individual supply curve.
How is a market supply curve similar to and different from an individual supply curve?
how is a market supply curve similar to and diffrent from an individual supply curve
Does monopolistically competitive firms have horizontal marginal cost curve?
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
