The marginal cost curve is the short-run supply curve

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In the short run, a firm's supply is determined by its marginal cost curve. This is because in the short run, a firm cannot change its fixed costs, and so its decision to produce and supply a quantity is based on whether the marginal revenue it receives from selling that quantity is greater than its marginal cost of producing that quantity. Thus the marginal cost curve represents the minimum supply price or reservation price for the firm, and so the firm will supply any quantity for which the market price is greater than or equal to its marginal cost. This means that the short-run supply curve is the portion of the marginal cost curve that lies above the minimum of the average variable cost curve, since the firm will not produce any quantity for which the market price is below its average variable cost. However, the short-run supply curve is not the same as the long-run supply curve, which is determined by the firm's ability to enter or exit the market in response to profits or losses.

The Marginal Cost Curve Is the Short-Run Supply Curve