Principles of Microeconomics / Unit 7 MIC 0619 short lesson, about 20 seconds
The Firm's Short-Run Supply Curve
Captions available
The idea
The firm's short-run supply curve is its marginal cost curve above the shutdown point: at each price above minimum average variable cost it supplies where marginal cost equals price; below, zero.
In practice
Trace marginal cost upward from the shutdown point and you have drawn supply.
Where people slip
Below the shutdown point supply jumps to zero; it does not follow marginal cost down.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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