Answer: AVC or Average Variable Cost
Explanation:
In the short run, a perfectly competitive firm will strive to at least produce at a point where they are able to cover their average variable cost because in the short run, fixed costs are already incurred and so cannot be reduced.
A company will therefore try to cover just the average variable costs and if it proves unable to do so, the best solution would be to shutdown in the short run.
So the lowest point on a perfectly competitive firm's short-run supply curve corresponds to the minimum point on the AVC curve.
