Question

In a competitive industry the industry's short-run supply curve is a. The horizontal sum of the marginal cost curves b. Determined by the average variable cost curve c. Determined by the average total cost curve d. The vertical sum of the marginal cost curves

Answer 1

Answer:

The correct answer here is option a.

Explanation:

The industry supply curve represents the quantity of goods that all the firms in the industry will supply at a different price levels.

The short run supply curve of a firm will be that part of the marginal cost curve or MC curve which lies above the minimum point of the average variable cost curve or the AVC curve.

These supply curves of all the firms in the industry will be summed up horizontally to find the short run industry supply curve.

So, option a will be the correct answer.