So we must not consider negative or downward sloping portion of the MC curve. ![]() Under perfect competition, in the short period, only MC curve is the supply curve.Īs is known to all, the MC curve is U-shaped having both negative and positive slopes while supply curve is positive sloping. It is said that all the supply curves are cost curves, but all cost curves (AFC, AVC, AC and MC) are not the supply curves. Recall that the supply of a commodity is a derived function. At a higher price, a greater quantity will be supplied and, at a lower price, a smaller quantity will be supplied. The supply curve shows the maximum quantities per unit of time which sellers will place in the market at various prices. ![]() Supply is the quantity which is offered for sale at a given price at a particular time. Let us learn about the short run supply curve of a competitive firm and industry.
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