How does the SMC curve above the SAVC curve represent the supply curve of a firm???

Dear Student

Please find below the solution to your query

  
1.   The short run supply curve of perfect competitive firm is the summation of the upward sloping portion of SMC (above the minimum point of SAVC), and vertical portion of price-axis

2.  If the SAC is above SAVC and MC is upward sloping, the supply curve is regarded as upward sloping part of SMC and hence, it is regarded as short run supply curve of a firm

Regards

 
 
 

  • 0
The SAVC curve after intersecting the SMC curve is known as the supply curve
  • 1
What are you looking for?