The table below illustrates the firm’s revenue and cost information while the price falls to $35. Determine the firm’s short-run supply curve.
The short-run supply curve of firm is its marginal cost curve above average variable cost. The below table lists marginal cost, total cost, fixed cost, variable cost and average variable cost. The firm will generate 8 or more units based on the market price and will not generates in the 0-7 units of output range since in this range AVC is greater than MC. While AVC is greater than MC, the firm minimizes losses by generating nothing.
