Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Short run supply curve of a firm | (I) | Minimum point of the AVC curve |
| (B) | Long run supply curve of a firm | (II) | Minimum point of the SAC curve |
| (C) | Short run break-even point | (III) | Rising part of the SMC curve from and above the minimum AVC |
| (D) | Short run shut down point | (IV) | Rising part of the LRMC curve from and above the minimum LRAC |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) - (III), (B) - (IV), (C) - (II), (D) - (I)
A supply curve is a part of a marginal cost curve. The shut down point and the break-even point are the minimum points of two average cost curves.
| List-I | List-II | Reason |
|---|---|---|
| (A) Short run supply curve of a firm | (III) Rising part of the SMC curve from and above the minimum AVC | Below the minimum AVC the firm produces nothing; above it, it produces where p = SMC. |
| (B) Long run supply curve of a firm | (IV) Rising part of the LRMC curve from and above the minimum LRAC | In the long run the price must cover the LRAC, and output is set where p = LRMC. |
| (C) Short run break-even point | (II) Minimum point of the SAC curve | Here the firm earns only normal profit. |
| (D) Short run shut down point | (I) Minimum point of the AVC curve | It is the last point on the supply curve with positive output. |
NCERT (2026-27): “4.4.1 Short Run Supply Curve of a Firm … Combining cases 1 and 2, we reach an important conclusion. A firm’s short run supply curve is the rising part of the SMC curve from and above the minimum AVC together with zero output for all prices strictly less than the minimum AVC.” “4.4.2 Long Run Supply Curve of a Firm … A firm’s long run supply curve is the rising part of the LRMC curve from and above the minimum LRAC together with zero output for all prices less than the minimum LRAC.” “4.4.3 The Shut Down Point … Therefore, along the supply curve as we move down, the last price-output combination at which the firm produces positive output is the point of minimum AVC where the SMC curve cuts the AVC curve. Below this, there will be no production. This point is called the short run shut down point of the firm.” “4.4.4 The Normal Profit and Break-even Point … The point on the supply curve at which a firm earns only normal profit is called the break-even point of the firm. The point of minimum average cost at which the supply curve cuts the LRAC curve (in short run, SAC curve) is therefore the break-even point of a firm.” |