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JAMB Economics 2009 Question 22

Question 22

Market Structures

The supply curve of a perfectly competitive firm is identical to its

  1. A.total cost
  2. B.marginal cost
  3. C.fixed cost
  4. D.variable cost
Show the answer and explanation

Answer: B (marginal cost)

Explanation

A competitive firm produces where P = MC, so its supply curve is its MC curve above minimum AVC.