The short-run market supply curve in a price-taker industry equals the horizontal sum of the individual firm's
A) MC curves above AVC.
B) AVC curves above marginal revenue.
C) MC curves above ATC.
D) MC curves between AVC and ATC.

Question

Quizplus · Accepted Answer

In a price-taker industry, the short-run market supply curve is the horizontal sum of the individual firms' marginal cost (MC) curves above the average variable cost (AVC), as firms will only produce if the price covers the AVC.

The Short-Run Market Supply Curve in a Price-Taker Industry Equals