The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.5
MC: Marginal cost curve
MR: Marginal revenue curve.ATC: Average-total-cost curve
AVC: Average-variable-cost curve
-What causes the market supply curve to shift rightward?

Question

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.5
  MC: Marginal cost curve
MR: Marginal revenue curve.ATC: Average-total-cost curve
AVC: Average-variable-cost curve
-What causes the market supply curve to shift rightward?

Quizplus · Accepted Answer

The entry of new firms will increase the market supply curve as there are more firms producing and selling the product. This will result in a shift rightward of the supply curve, leading to lower prices and lower profits for the existing firms in the market. The other options (A, B, C, D) are either irrelevant or will lead to a shift in the demand or cost curves, not the supply curve.

The Figure Given Below Shows the Revenue and Cost Curves