We can add horizontally the supply curves of firms to get a market supply curve even for low prices, although in the short run some firms will close down if they cannot cover their variable costs.

Question

Quizplus · Accepted Answer

This statement is true. In the short run, some firms may choose to shut down if they cannot cover their variable costs, but the supply curves of the remaining firms can still be added horizontally to create a market supply curve.

We Can Add Horizontally the Supply Curves of Firms to Get