What is the supply curve of a firm in the short run?
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What is the supply curve of a firm in the short run?
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Let's create a short-run supply curve for an organisation. This derivation will be divided into two parts. When the market cost price is greater than or equal to the minimal AVC, establish the enterprise's profit-maximizing output degree. When the market cost is less than the minimum AVC, we can now establish the enterprise's profit-maximizing output degree.

Case 1: The price exceeds or equals the minimal AVC.

 Assume the market cost price is p1, which is higher than the AVC minimum. On the increasing half of the SMC curve, we equalise p1 with SMC, resulting in the output degree q1. It's also worth noting that the AVC in q1 does not exceed the market cost price, p1. As a result, at q1, all three conditions in section 3 are met. As a result, when the market cost price is p1, the short-run output degree of the firm is q1.  

Case 2: The price is lower than the AVC minimum.

 Assume the market cost price is p2, which is lower than the AVC minimum. If a profit-maximizing firm produces a positive production in the near run, the market cost price, p2, must be higher than or equal to the AVC at that output level. The AVC clearly outperforms p2 in the image. In other words, the company is unable to produce a profit. As a result, if the market price is p2, the firm will produce no output.
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