A perfectly competitive firm\'s short-run supply curs e is the part of its margi

Question

A perfectly competitive firm's short-run supply curs e is the part of its marginal cost curve that is: upward sloping. above the minimum level of average variable cost. above average fixed cost. above the minimum level of average total cost. Assume lawn mowing is a perfectly competitive market. Short-run cost curves for "Kim-n-Kanyc's Klipping" lawn mowing company are shown below: In Exhibit 15 above, if the market price of mowing lawns is $16 per lawn, then Kim-n-Kanye's Klipping will earn the biggest profit by mowing: 5 lawns per day. 7 lawns per day. 8 lawns per day. as many lawns per day as is physically possible.

Explanation / Answer

ans 36)

b) above the minimum level of average variable cost

In short run MC curve is the supply curve, but only that portion which lies above the minimum AVC, the shut down point. because in short run if only variable cost is fully covered by the prices (bearing loss equal to fixed cost), then only firm operates.(

ans 37

c) 8 lawns per day

for a firm supply is given by upward sloping part of MC above minimum AVC in short run. so when price =16, quantity will be determine by MC at which 8 lawns per day mowed.

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