"An industry's short-run supply curve is constructed by adding horizontally all the average variable cost curves of firms in that industry." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. An industry's short-run supply curve is constructed by summing horizontally all of the individual firms' supply curves, which are their marginal cost curves (not average cost curves) above their respective minimum average variable cost points.
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The Fed tries to prevent major financial crises through its control of financial markets
a. True b. False Indicate whether the statement is true or false
If the interest rate rises, the
a. quantity of loanable funds demanded by firms decreases b. quantity of loanable funds demanded by government decreases c. quantity of loanable funds demanded by firms increases d. quantity of loanable funds demanded by government increases e. demand for loanable funds curve shifts to the right