In perfect competition, the firm’s _____ above AVC has the identical shape of the firm’s supply curve

Marginal revenue curve
Marginal cost curve
Average cost curve
None of the above

The correct answer is: A. Marginal revenue curve.

In perfect competition, firms are price-takers, meaning that they cannot influence the market price of their product. As a result, the marginal revenue curve for a perfectly competitive firm is equal to the market price. The marginal cost curve is the additional cost incurred by producing one more unit of output. The average cost curve is the total cost divided by the number of units produced.

The firm will produce up to the point where marginal revenue equals marginal cost. At this point, the firm is maximizing its profits. The supply curve for a perfectly competitive firm is the portion of its marginal cost curve that lies above its average variable cost curve. This is because the firm will only produce if the price is greater than or equal to its average variable cost.

Here is a diagram that illustrates the relationship between the marginal revenue curve, the marginal cost curve, the average cost curve, and the supply curve for a perfectly competitive firm:

[Diagram of a perfectly competitive firm]

The marginal revenue curve is the blue line. The marginal cost curve is the green line. The average cost curve is the orange line. The supply curve is the portion of the marginal cost curve that lies above the average variable cost curve, which is the dashed line.

As you can see, the marginal revenue curve intersects the marginal cost curve at the point where the marginal cost curve is above the average variable cost curve. This is the point at which the firm is maximizing its profits. The supply curve for the firm is the portion of the marginal cost curve that lies above the average variable cost curve. This is because the firm will only produce if the price is greater than or equal to its average variable cost.

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