The short-run individual firm's supply curve is made up of the zero-profit equilibrium levels of output as the industry expands due to entry.

Question

Quizplus · Accepted Answer

The short-run individual firm's supply curve is made up of the zero-profit equilibrium levels of output as the industry expands due to entry. This is because in the short run, firms are unable to enter or exit the industry, so the only way for the industry to expand is for existing firms to increase their output. As firms increase their output, they will eventually reach a point where they are making zero profit. This is the point at which the firm's supply curve intersects the industry's demand curve.

The Short-Run Individual Firm's Supply Curve Is Made Up of the Zero-Profit