Perfect competition:  Close down point and marginal cost curve is the supply curve
Channel: Werner Lost
Date: 2012-01-01

If a firm wishes to maximise its profits it should produce the level of output where marginal cost equals the marginal revenue and that it should shut down its business if it cannot cover its variable cost. It follows that the supply curve for a profit-maximising firm is that part of the marginal cost curve that is above the minimum average variable cost.