Discussion
What is the short run supply curve of a firm in a perfectly competitive market ?
Answer: C
The short-run supply curve is the part of the marginal cost curve that lies above the average variable cost curve.
A competitive firm produces where price equals marginal cost. In the short run it continues to produce as long as price covers average variable cost, since fixed costs must be paid anyway. Below minimum AVC (the shutdown point) it produces nothing. So its supply curve is the rising MC curve from the minimum of AVC upwards.
The portion above average total cost is the long-run supply condition, where the firm must cover all costs. Average fixed cost plays no part in the shutdown decision, and the AVC curve itself is not a supply curve.
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