Principles of Microeconomics / Unit 7 MIC 0620 short lesson, about 20 seconds
Market Supply Is the Sum of Marginal Costs
Captions available
The idea
Market supply adds every firm's supply curve horizontally: at each price, the sum of the quantities their marginal cost curves give. Market supply is a sum of marginal costs.
In practice
A thousand farms each growing seven flats at twenty-five dollars supply seven thousand.
Where people slip
This is why supply measures marginal cost, and why price equals marginal cost at a competitive equilibrium.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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