The short-run supply curve for a perfectly competitive firm is its A. marginal cost curve above the average variable cost curve. B. marginal cost curve above the average fixed cost curve. C. average variable cost curve above the marginal cost curve. D. average variable cost curve above the average total cost curve. E. average variable cost curve above the average fixed cost curve.

Step 1: Define the Problem

Identify the key components of the question that need to be addressed:

• Determine which curve represents the short-run supply curve for a perfectly competitive firm.

Step 2: Break Down the Problem

Divide the problem into smaller, manageable parts:

• Understand the characteristics of a perfectly competitive firm's cost curves.
• Identify the relationship between the marginal cost curve and other cost curves.

Step 3: Apply Relevant Concepts

Use appropriate academic theories or formulas to solve each part of the problem:

• In the short run, a perfectly competitive firm's supply curve is the portion of its marginal cost (MC) curve that lies above the average variable cost (AVC) curve. This is because the firm will only produce if it can cover its variable costs.

Step 4: Analysis, Verify and Summarize

Analysis each part in detail if necessary, carry out the calculations by steps. Verify the calculations result and summarize the findings:

• The marginal cost curve represents the additional cost of producing one more unit.
• The firm will supply output as long as the price is above the AVC, ensuring it covers its variable costs.
• Therefore, the correct relationship is the MC curve above the AVC curve.

Final Answer

Present the final result in a concise manner:

• The short-run supply curve for a perfectly competitive firm is its A. marginal cost curve above the average variable cost curve.