Derive the short run industry suply curve in perpectly competitive industry facing incresing cost
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Firms in a competitive market must take the price as given. ... The individual supply curve shows how much output a firm in a perfectly competitive market will supply at any given price. Provided that a firm is producing output, the supply curve is the same as marginal cost curve.
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Supply Curve of an Increasing Cost Industry:
The external diseconomies outweigh the external economies. The increased demand for the productive resources required to produce larger output to meet increased demand for the product raises their prices resulting in higher cost of production.
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