Short-run supply curve

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Definition

To define a short-run supply curve, we need to fix the following backdrop:

  • The specific good, service, or commodity being produced.
  • A unit for measuring the quantity of the commodity.
  • A unit for measuring price.
  • A convention for whether sales taxes are included in the stated price.
  • A certain firm or set of firms who are the potential producers/sellers of the good.
  • The fixed costs incurred by the firm, which typically cannot be changed in the short run.
  • An economic backdrop that includes all the other determinants of supply other than the unit price. These are primarily the prices of various factors of production.

With this backdrop, the short-run supply curve is a curve drawn with:

  • The vertical axis is the price axis, measuring the price per unit of the good
  • The horizontal axis is the quantity axis, measuring the total quantity supplied at the given price by the total of all the economic actors chosen above.

Note that the short-run supply curve makes sense ceteris paribus -- keeping the other determinants of supply constant.