What is the supply curve of a firm in the long run?
The long run supply curve of a firm 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.
When the market price is greater than or equal to the minimum LRAC, the firm supplies the output level where the price equals the LRMC on the rising part of the curve. This ensures that the LRAC does not exceed the market price. However, if the market price falls below the minimum LRAC, the firm produces zero output because it cannot cover its costs.
Explanation
The answer is derived directly from the summary points and section 4.4.2 of the provided text. It identifies the specific portion of the cost curve that constitutes the supply curve in the long run, distinguishing it from the short run supply curve (which relies on AVC). The explanation covers the two necessary conditions: the profit-maximizing output condition when price covers minimum LRAC, and the shut-down condition (zero output) when price is too low.