Final answer:
The claim about a purely competitive firm's supply curve being perfectly elastic at the minimum average total cost is false. Rather, the marginal cost curve serves as the firm's supply curve starting from the minimum of the average variable cost, not the average total cost.
Step-by-step explanation:
The statement that a purely competitive firm's short run supply curve is perfectly elastic at the minimum average total cost is false. In fact, for a purely competitive firm, the marginal cost curve is identical to the firm's supply curve starting from the minimum point on the average variable cost curve. The portion of the marginal cost curve above the minimum average variable cost curve becomes the firm’s supply curve because this is the point from which the firm will offer goods for sale, provided that the price is at least as high as the minimum average variable cost.
In the long run, if there is only demand for a limited number of firms to reach the bottom of the average cost curve, some firms may exit the industry. This aligns with historical situations, such as the one in the 1970s in the United States, where limited demand led to industry changes and firm exits.