The supply curve for a perfectly competitive industry is the horizontal summation of the individual firms'

Question

Quizplus · Accepted Answer

The supply curve for a perfectly competitive industry is determined by the marginal cost curves of individual firms, as they are the key factor in determining production decisions in the short run. The supply curve represents the total amount of output the industry is willing and able to produce at each possible price level. Therefore, the correct choice is E as the supply curve is the horizontal summation of the individual firm's MC curves above their AVC.

The Supply Curve for a Perfectly Competitive Industry Is the Horizontal