The ________ for a perfectly competitive industry is the horizontal sum of the individual firmsʹ marginal cost curves above AVC.
A) short-run industry supply curve
B) long-run industry supply curve
C) short-run industry marginal revenue curve
D) long-run industry marginal revenue curve

Question

Quizplus · Accepted Answer

The short-run industry supply curve for a perfectly competitive industry is derived by horizontally summing the marginal cost curves of all firms in the industry, above the point where the marginal cost curve intersects the average variable cost (AVC) curve. This is because, in the short run, firms will supply output as long as the price covers their AVC, even if they are making a loss in terms of not covering their total costs.

The ________ for a Perfectly Competitive Industry Is the Horizontal