Question

The short-run industry supply curve is the

Answer 1

Answer: a. horizontal summation of the short-run supply curves for all firms in the industry

Explanation: R. G. Lipsey stated that the short-run industry supply curve is the horizontal summation of the short-run supply curves for all firms in the industry. In a perfect competitive industry, each produces quantity of goods that are sold at similar prices, therefore, it is quite obvious that the industry supply curve in the short run, under perfect competition is equal to the horizontal summation of all firms’ supply curves or its marginal cost curves (shows the change in the total cost that arises when the quantity produced is incremented by one unit) above the minimum point of the average variable cost curve (shows the relationship between costs incurred by a firm in the short-run production of a good or service and the quantity produced curve).

Answer 2

Answer: The correct answer is "a. horizontal summation of the short-run supply curves for all firms in the industry.".

Explanation: The supply curve of the industry, in a situation of  short term, which under perfect competition is obtained  horizontally adding supply curves  individuals of all companies.