Authors libby rittenberg 491

Figure 9.10 Marginal Cost and Supply The supply curve for a firm is that portion of its MC curve that lies above the AVC curve, shown in Panel (a) To obtain the short-run supply curve for the industry, we add the outputs of each firm at each price The industry supply curve is given in Panel (b) Now suppose that the astrological forecast industry consists of Madame LaFarge and thousands of other firms similar to hers The market supply curve is found by adding the outputs of each firm at each price, as shown in Panel (b) of Figure 9.10 "Marginal Cost and Supply" At a price of $10 per call, for example, Madame LaFarge supplies 14 calls per day Adding the quantities supplied by all the other firms in the market, suppose we get a quantity supplied of 280,000 Notice that the market supply curve we have drawn is linear; throughout the book we have made the assumption that market demand and supply curves are linear in order to simplify our analysis Looking at Figure 9.10 "Marginal Cost and Supply", we see that profitmaximizing choices by firms in a perfectly competitive market will Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 491