A supply curve shows quantities supplied at various prices. It also shows the
A) marginal cost of production.
B) marginal benefit of the good.
C) total profit the firm earns at a given level of output.
D) producer surplus, which is equal to the slope of the supply curve.
E) total cost of production.

Question

Quizplus · Accepted Answer

A supply curve shows the quantities supplied at various prices, and also the marginal cost of production. Marginal cost is the additional cost of producing an extra unit of output, and it is reflected in the upward slope of the supply curve. As prices increase, producers are willing to supply more of a good, but at a higher cost. Therefore, the supply curve shows the relationship between the price of a good and the cost of producing that good.

A Supply Curve Shows Quantities Supplied at Various Prices