Deriving the Supply Curve: What is Sunk Cost: Shutdown price
What's a supply curve? It's the curve that shows how much of a good the firm's willing to supply at each price of the good. Here's the table showing the marginal cost to producing another Golden Snitch at each level of production from earlier when the prices snitches was $30 the firm shows to produce eights Snitches this is the point at which price equals marginal cost. See The Graph Where the x-axis is quantity and the y-axis is price if the price were different the firm would make a different choice. The price of a snitch was $10 for the marginal cost to be equal to the price and profit to be maximized. The firm would need to produce six snitches and if the price is $20 the firm would want produce seven snitches to get marginal costs equal to price maximizing profit. We can do the same thing for prices of $4 and $50 and we can connect the dots to include intermediate prices like $13 and 4750 each of these points on the curve captures the answer the firm gets the fo...