Answer:
The correct answer is option b.
Explanation:
A purely competitive firm will supply at the level of output where the price of the product is able to cover the average variable cost and the price is equal to the marginal cost. So the supply curve will be the portion of the marginal cost curve which lies above the average variable cost curve.
This supply curve shows the different points where the price is equal to marginal cost and higher than the average variable cost.
In the long run, the firm produces at the price which is able to cover the average total cost.
