Question

The short-run supply curve of the individual firm is:

a. The rising segment of its average total costs curve.
b. The entire segment of its average total cost curve.
c. The rising segment of its average variable costs curve.
d. The rising segment of its marginal cost curve above average variable cost.

Answer 1

A firm's individual supply curve is equal to its marginal cost curve above the average variable cost curve. If marginal costs increase, the firm's supply curve will shift up and to the left.

Step-by-step explanation:

A firm's individual supply curve is equal to the firm's marginal cost curve above the average variable cost curve. This means that every time a firm receives a price from the market, it will be willing to supply the amount of output where the price equals marginal cost. If the marginal costs increase, the firm's individual supply curve will shift up and to the left. This is because the firm will be willing to supply less output for a given price, as the higher marginal costs make it less profitable to produce.