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- Subject
- Costs , Supply And Perfect Competitioneconomics-mcqs › costs-supply-and-perfect-competition
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
Which segment of the cost curves represents the supply curve for a perfectly competitive firm in the long run?
Multiple choice question for Costs , Supply And Perfect Competition. Select an option, then review the explanation below.
Explanation
In the long run, a competitive firm's supply curve corresponds to the portion of the marginal cost curve that lies above the average total cost curve. This is because the firm will only supply output if the price covers all costs, including both variable and fixed costs, which is represented by the average total cost. Other curves or portions do not accurately reflect the firm's supply decisions in the long run.
More Costs , Supply And Perfect Competition MCQs
Practice related questions from the same subject.
- 1.In the context of a perfectly competitive firm, what represents its short-run supply curve and its long-run supply curve respectively?
- 2.Under what condition will a firm cease production and produce nothing in the short term?
- 3.In the short run, the average total cost is composed of which two components?
- 4.What is the relationship between marginal cost and average cost when the average cost is decreasing and when it is increasing?
- 5.What does it indicate when the long-run average cost curve slopes downward from left to right?