Principles of Microeconomics / Unit 7 MIC 0621 short lesson, about 20 seconds
Cost Shifters Are Supply Shifters
Captions available
The idea
Anything that shifts a firm's marginal cost curve shifts its supply curve by the same amount: input prices, technology, taxes. Unit two's supply shifters are marginal cost shifters.
In practice
Dearer fertilizer lifts every farm's marginal cost and the market supply curve with it.
Where people slip
A change in fixed cost shifts average total cost, not marginal cost, so it moves no short-run supply curve.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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