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The horizontal sum of marginal cost curves (above AVC) of all the firms in an industry is the short-run industry supply curve.
Industry Supply Curve
A graphical representation showing the total quantity of a good or service that producers in an industry are willing and able to supply at different price levels.
Marginal Cost Curves
A graphical representation showing how the cost of producing one more unit of a good varies with the quantity of the good produced.
AVC
Average Variable Cost, which is the total variable costs divided by the quantity of output produced.
- Detail the determinants of a firm's short-run supply curve.
- Analyze the effects of market entry and exit on industry supply conditions.
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Learning Objectives
- Detail the determinants of a firm's short-run supply curve.
- Analyze the effects of market entry and exit on industry supply conditions.
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