Industry Supply

We have seen how to derive a firm's supply curve from its marginal cost curve. But in a competitive market there will typically be many firms, so the supply curve the industry presents to the market will be the sum of the supplies of all the individual firms. In this chapter we will investigate the industry supply curve.

23.1 Short-Run Industry Supply

We begin by studying an industry with a fixed number of firms, n. We let Si(p) be the supply curve of firm i, so that the industry supply curve, or the market supply curve is n i=1

which is the sum of the individual supply curves. Geometrically we take the sum of the quantities supplied by each firm at each price, which gives us a horizontal sum of supply curves, as in Figure 23.1.

The industry supply curve. The industry supply curve (S\ + S2) is the sum of the individual supply curves (Si and

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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